1. Costs are functionalized or grouped into the different cost categories related to providing service. For a stormwater utility, this typically includes collection and pumping. This step is largely accomplished by the utility’s accounting system (chart of accounts).
2. The functionalized costs are then allocated to specific cost components. Allocation refers to the arrangement of the functionali zed data into the appropriate cost component (s).
For example, stormwater costs are typically allocated as volume and customer -related costs.
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3. Once the costs are allocated to the appropriate cost component(s), each cost component is then proportionally distributed to each customer class of service (e.g., residential, commercial, industrial). The distribution is based on each customer class’s relative or proportional contribution to the cost component. For example, customer- related costs are distributed to each class of service based on the total number of custo mers in each class of service. Once costs are distributed, the total amount of revenues needed from each customer class of service, to achieve cost-based rates, can be determined.
Note that the cost of service approach can vary from utility to utility. Typically, the approach will be based on the current, or proposed, rate structure. For example, an equivalent billing unit approach infers the proportionality between customers based on the definition of the equivalent billing unit and the cost of service analysis can be simplified by dividing the total costs by the number of equivalent billing units the system serves. As a result, each cost of service analysis is specifically developed based on the unique characteristics, billing approach, customer base, and rate structure of the specific utility.
2.5 Designing Utility Rates
Rates that meet the utility’s objectives are designed based on the results of the revenue requirement and cost of service analys es. This approach results in rates that are strictly cost- based. While rate -setting can consider factors such as ability to pay, continuity of past rate philosophy, economic development, ease of administration, and customer understanding , such factors are incidental to cost -based, proportional rates . T he proposed rates must take into consideration each customer class’s proportionate share of costs distributed through the cost of service analysis to meet the requirements of the California Constitution.
2.6 Economic Theory and Rate Setting
One of the major justifications for a comprehensive rate study is founded in economic theory. Economic theory suggests that the price of a commodity must roughly equal its cost if parity among customers is to be maintained. This statement’s implications on utility rate designs are significant. When costing and pricing techniques are refined, consumers have a more accurate
understanding of the cost to provide stormwater service.
“Economic theory suggests
that the price of a
commodity must roughly
equal its cost if parity
among customers is to be
maintained.”
ATTACHMENT A
3 Stormwater Revenue Requirement
3.1 Introduction
This section of the report details the development of the revenue requirement analysis for the Department’s Study. The revenue requirement analysis is the first analytical step in the comprehensive rate study process. From this analysis , a determination can be made as to the overall level of rate revenue adjustments needed to provide adequate and prudent funding for both O&M and capital needs of the utility. The primary objective of the Study was to develop cost-based and proportional rates that comply with the California Constitution.
3.2 Determining the Revenue Requirement
In developing the Department’s stormwater revenue requirement for the Study period, the objective is that the utility must financially “stand on its own” and be properly funded. That is, no rate revenues are transferred from other Department or City funds to support the stormwater utility. As a result, the revenue requirement analysis assumes the full and proper funding needed to operate and maintain the stormwater system on a financially sound and prudent basis over the Study time period.
3.2.1 Establishing a Time Frame and Approach
To begin calculating the revenue requirement for the Department’s stormwater utility, a time frame was established for the analysis (i.e., the Study period ). The Study period was defined as the projected year end FY 2025 and adopted FY 2026 budgets plus an 8-year review period (FY 2027 – FY 2034). This time period was determined to be an appropriate amount of time for the revenue requirement analysis to evaluate the data and information and establish proposed rates for the next five fiscal years . The revenue requirement was projected over a multi- year period based on assumed escalation factors as well as historical figures and anticipated projections .
Reviewing a multi-year time period is recommended to identify major expenses that may be on the horizon. By anticipating future financial requirements, the Department can begin planning for these changes sooner, thereby minimizing short -term rate impacts and overall long -term rates.
The second step in determining the revenue requirement was to determine t he basis for accumulating costs. As discussed in Section 2 of the report, the revenue requirement analysis was developed using the cash basis approach. The cash basis approach is the typical methodology utilized by municipal utilities to set their revenue requirement. This is also the methodology that the Department has historically used to establish its stormwater revenue requirement. Table 3 – 1 provides a summary of the cash basis approach and the cost components used to develop the Department’s stormwater revenue requirement.
ATTACHMENT A
Table 3 – 1
Overview of the Department’s Cash Basis Revenue Requirement + Stormwater Operation and Maintenance Expenses
+ Transfers
+ Rate Funded Capital
+ Debt Service (Principal + Interest) – Existing and Future ± Reserve Funding________________________________
= Total Stormwater Revenue Requirement
− Miscellaneous Revenues__________________________
= Net Revenue Requirement (Balance Required from Rates)
Given a time period around which to develop the revenue requirement and a method to accumulate the costs , the focus shifts to the development and projection of the revenues and expenses of the Department’s stormwater utility.
The primary financial inputs in the development of the revenue requirement were the Department’s projected year end FY 2025 and adopted FY 2026 budget documents , recent customer billing data, historical financial reports, and the Department’s c apital improvement plan (CIP). Presented below is a detailed discussion of the steps and key assumptions contained in the development of the projections of the Department’s stormwater revenue requirement analysis.
3.2.2 Projecting Rate and Other Miscellaneous Revenues
The first step in developing a projection of the stormwater rate revenues, at present rate levels, was to determine the projected billing units for each customer group. The billing units for each customer group were based on recent customer billing data to determine the current customer billing characteristics . These billing units were then multiplied by the applicable current stormwater rates. This method of
independently calculating revenues
links the projected revenues used
within the analysis to the projected
billing units. It also helps to confirm
that the billing units used within the
Study are reasonable for purposes of
projecting future rev enues,
distributing costs and ultimately,
establishing the proposed rates. The
rate revenues are also shown in
Exhibit 3 under “Rate Revenues” for
FY 2025.
Based on the Department’s adopted stormwater rate schedule, the majority of the rate revenues are derived from non -residential customers. In total, and at currently adopted rate levels, the Residential $2,509
Non-Residential
$3,558
FY 2025 Rate Revenues ($000s)
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Department’s stormwater system is projected to receive approximately $ 6.1 million in rate revenue in FY 20 26. Based on current City planning documents, the Study has assumed a conservative level of customer account growth of 0.5 % / year. By FY 20 34, the rate revenues - assuming no rate adjustments - are projected to be approximately $ 6.3 million. The detailed calculation of the revenues at present rates is included in Exhibit 5 of the Technical Appendix.
In addition to rate revenues, the Department also receives other miscellaneous revenues. These are revenues related to interest income, storm drain administration fees, agency reimbursements, etc. In total, the Department is projected to average approximately $991,000 annually in miscellaneous revenues over the projected time period.
On a combined basis, taking into account rate revenues and miscellaneous revenues, the Department’s stormwater utility has total projected revenues of approximately $7.0 million in FY 2026, increasing to approximately $7.4 million by FY 2034 as a result of the estimated growth as noted above. The assumptions used for projecting growth and increases in miscellaneous revenues can be found in Exhibit 2 of the Technical Appendix. Furthermore, the projection of rate and miscellaneous revenues can be found in Exhibit 3 of the Technical Appendix.
3.2.3 Projecting Operation and Maintenance Expenses
Operation and maintenance (O&M) expenses are incurred by the Department to maintain the stormwater system at a consistent service level. The starting point of the projection of O&M expenses was the Department’s projected year end FY 2 025 and adopted FY 2026 budgets.
Budgeted O&M expenses were projected over the S tudy time period based on his torical inflationary factors. These factors took into consideration the Department’s historical and projected cost increases. The factors ranged from 2.8% to 25.0% annually for the various types of expenses (e.g., labor, benefits, materials & supplies). Several specific costs were adj usted based on known increases and were provided by the Department and City staff. These were items related to CalPERS and other benefit related costs. In total, O&M expenses were projected to increase at an average annual inflation rate of approximately 6.4% over the Study time period.
As a note, this is consistent with annual changes in stormwater O&M costs over the past several years. The total operation and maintenance expenses for the stormwater utility are budgeted to be approximately $ 9.2 million in FY 2026. Over the five-year rate setting period, total O&M expenses are projected to increase to approximately $11.7 million by FY 2031. A summary of the O&M expenses is shown as a line item in Table 3 – 3 and Exhibit 3 of the Technical Appendix.
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3.2.4 Projecting Capital Funding Needs
A key component in the development of the stormwater revenue requirement is to properly and adequately fund capital improvement needs in the near and long term. One of the major issues facing utilities across the U.S. is the amount of deferred capital projects and funding pressure from regulatory-related improvements. The proper and adequate funding of capital projects is an important issue for all stormwater utilities and is not just a local issue or concern of the Department. To accomplish this, the Department recently completed a master plan for the stormwater system, which resulted in the identification of a c apital improvement plan (CIP) to address both the short and long-term capital needs of the stormwater utility. The Department’s CIP outlines the infrastructure improvements necessary to provide stormwater service to existing and future stormwater customers.
In general, there are three types of capital projects that the Department may need to fund. These include the following types:
Renewal and replacement projects
Growth/capacity expansion projects
Regulatory-related projects
A renewal and replacement project is essentially a project to maintain the existing system that is in place today. Existing facilities become worn out, obsolete, etc. T he Department should continuously be making investments to maintain the integrity of the facilities with renewal and replacement projects to ensure continued, uninterrupted stormwater service. Growth or capacity expansion projects are related to providing service to new customers. This may be through expansion of the existing system or construction of new facilities to provide service to customers within the Department’s service area. Additionally, certain projects may be a function of a regulatory requirement in which the Federal or State government mandates the need for an improvement to the system to meet regulatory standards. Understanding these different types of capital projects is important because it may help to explain why costs are increasing and as a result, the cost drivers for any needed rate adjustment.
The way in which projects are funded may vary b y the type of capital project. For example, renewal and replacement projects should be funded through annual rates on a “pay-as-you-go basis”. In contrast to this, growth or capacity expansion projects may be funded through the collection of connection fees (i.e., growth-related charges) in which new development pays a proportional share of the cost of improvements required as a result of their connection (impact).
Finally, regulatory projects may be funded by a variety of different means, which may include one or more sources such as rates, long-term debt, grants, etc.
While the above discussion appears to neatly divide capital projects into three clearly defined categories, the reality of working with specific capital projects may be more complex. For example, a pump may be replaced, but while being replaced, it is upsized to accommodate the need for greater capacity. There are many projects that share these “joint” characteristics. At the same time, projects may not be “replacement” related, but rather “improvement” related.
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The Department recently completed a master planning process for the stormwater system, which identified priority projects. Important to note is that the Study includes only Priority 1 projects during the five-year rate setting period. N ote that the master plan identified additional priority projects that the Department will need to complete outside the Study review period. Provided below in Table 3 – 2 is a summary of the stormwater capital funding analysis for the rate setting period.
Table 3 – 2
Summary of the Stormwater Capital Improvements ($000)
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
Capital Improvement Projects $1,300 $2,480 $2,328 $1,035 $736 $299 Master Plan Projects 0 0 4,206 9,156 9,431 12,552
Future Unidentified Capital Improv. 0 0 0 0 0 0
Transfer to Capital Reserve 0 170 92 0 2,573 400 Total Capital Improvement Projects $1,300 $2,650 $6,625 $10,192 $12,740 $13,250 Less: Other Funding Sources
Operating Fund - Stormwater $0 $0 $0 $0 $0 $0
Capital Fund - Stormwater 0 0 0 167 0 0
State Grants 1,300 1,700 0 0 0 0
New Public Works Trust Fund Loans 0 0 0 0 0 0
New Revenue Bonds 0 0 0 0 0 0 Total Other Funding Sources $1,300 $1,700 $0 $167 $0 $0 Rate Funded Capital $0 $950 $6,625 $10,025 $12,740 $13,250
As shown in Table 3 – 2, the funding of capital is provided through annual rate levels (“Rate Funded Capital”), state grants, and available reserves. In this way, no long-term debt is issued to fund the CIP during the Study rate setting period and the CIP is funded on a pay -as-you-go approach.
While the total amount of a project may vary from year to year, the stormwater capital funding plan has attempted to provide a consistent funding so urce for the replacement of deteriorating system assets. In this case, the stormwater utility’s rates will fund an amount of $ 950,000 in FY 2027. Given the identified capital needs for the stormwater system , the Department is committed to making an effort to increase this funding component to maintain the stormwater infrastructure and replacement needs . As such, the rate funded ca pital is projected to increase annually to $13.3 million by FY 2031. Note in some years rate funded capital exceeds total capital improvements. In those years funds are transferred to reserves to fund projects in subsequent years. To establish a prudent level of annual replacement funding through rates, HDR worked with Department staff to develop a funding plan for the CIP . In developing this financial plan, HDR and the Department have attempted to minimize rate impacts while funding the planned capital projects of the Department.
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3.2.5 Projection of Debt Service
The Department currently has no outstanding long -term debt issu ances related to the stormwater utility. As noted previously, n o new additional debt has been assumed during the Study rate setting period.
It is important to note that HDR is not advising the Department on the terms of any long-term debt issuances but rather identifying the overall funding needs. As noted previously , HDR is not acting in a municipal advisor role to the Department for the issuance of any long-term borrowing.
3.2.6 Reserve Funding
The final component of the revenue requirement analysis is reserve funding. This can be described as additional transfers of revenue to reserve funds to maintain prudent ending fund balances or for future funding of specific or unanticipated projects. Additionally, the balance of funds after the expenses are paid is transferred to the operating fund to maintain minimum fund balances. The Department has a reserve policy in place to maintain six months of operating expenses in reserves , which is equal to approximately $ 4.5 million for FY 2026. The Study was developed to meet this target minimum over the review period (FY 2027 – FY 2031). During the Study time period, reserve levels are used to smooth out the rate adjustments as needed in some years and transferred in others if available to continue to maintain prudent ending reserve balances.
3.2.7 Summary of the Stormwater Revenue Requirement
Given the above projections of revenues and expenses, a summary of the stormwater revenue requirement analysis can be developed. In developing the revenue requirement analysis, consideration was given to the financial planning considerations of the Department. In particular, emphasis was placed on attempting to minimize rates yet still having adequate funds to support the operational activities and funding of capital projects throughout the Study time pe riod.
Presented below in Table 3 – 3 is a summary of the Department’s projected stormwater revenue requirement. Detailed exhibits of this analysis can be found in the Technical Appendix (Exhibits 1 – 5).
ATTACHMENT A
Table 3 – 3
Summary of the Stormwater Revenue Requirement Analysis ($000) FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
Revenues
Rate Revenues $6,097 $6,128 $6,158 $6,189 $6,220 $6,251 Other Revenues 948 895 920 935 976 1,027
Total Revenues $7,045 $7,023 $7,078 $7,125 $7,196 $7,278 Expenses
O&M Expenses $9,197 $10,149 $10,516 $10,897 $11,291 $11,700 Rate Funded Capital 0 950 6,625 10,025 12,740 13,250 Net Annual Debt Service 0 0 0 0 0 0
To / (From) Reserves (2,152) 1,022 195 206 202 198 Total Expenses $7,045 $12,121 $17,335 $21,129 $24,233 $25,148 Bal./(Def.) of Funds $0 ($5,098) ($10,257) ($14,004) ($17,037) ($17,870)
As can be seen, the revenue requirement has summed the O&M, annual rate funded capital, net annual debt service, and reserve funding components. The total revenue requirement is then compared to the total revenues, which include both rate revenues – at current rate levels – and other revenues. Note, revenues are increasing based on the assumed growth in customers which increases revenues when calculated at present rate levels.
From this comparison , a balance or deficiency of funds in each year can be determined. This balance or deficiency of funds is then compared to the projected revenues from current rates to determine the level of rate adjustment needed to meet the revenue requirement. It is important to note that the “Bal. / (Def.) of Funds” row is cumulative. That is, adjustments in the initial years will reduce the deficiency in later years.
The revenue r equirement in Table 3 – 3 ha s been developed to meet the financial planning objectives of the Department. More specifically, and as an enterprise fund, the Department needs to adequately and prudently fund its stormwater operating and capital needs , for this study only Priority 1 projects were included . The proposed revenue adjustments are a function of assumed inflation over the time period , coupled with the need to increase capital improvement funding from rates (renewal and replacement funding) , as well as maintaining prudent financial metrics (e.g., minimum reserve levels).
Over the five -year rate setting period, a nnual deficiencies range from $ 5.1 million to $17.9 million. Over the Study time period, the total deficiency in revenues is approximately $64.3 million absent rate revenue increases. The overall revenue adjustment reflects the revenues needed for the system as a whole. The more detailed revenue requirement analysis is included in Exhibit 3 of the Technical Appendix.
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3.3 Consultant’s Conclusions
Based on the revenue requirement analysis developed herein, HDR recommends that the Department increase stormwater revenues over the next five -year period (FY 2027 – FY 2031).
HDR has reached this conclusion for the following reasons:
Revenue adjustments are necessary to fund the Department’s capital improvement needs, which have been outlined by a system review and planning process Revenue adjustments are necessar y to reflect current an d ongoing annual inflationary costs related to the O&M expenses of the stormwater utility The proposed revenue adjustments provide an approach for the Department to provide long-term, sustainable funding levels for the stormwater utility In reaching this conclusion, HDR would recommend that the Department adopt the proposed revenue adjustments in order to provide sufficient funding for annual O&M and capital improvement projects over the next five-year period.
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4 Stormwater Cost of Service
4.1 Introduction
In the previous section, the revenue requirement analysis focused on the total sources and applications of the revenues required to adequately fund the Department’s stormwater utility O&M and capital expenses . This section will provide an overview of the cost of service analysis developed for the Department’s stormwater utility.
The stormwater cost of service analysis is concerned with the proportional distribution of the total revenue requirement on a per equivalent residential unit (ERU). This provided the cost basis and proportionality for the rate on a per ERU basis. The previously developed revenue requirement was utilized in the development of the cost of service analysis. It should be noted that given the use of an ERU to apply the stormwater rates, the cost of service analysis is simplified.
4.1.1 Objectives of a Cost of Service Analysis
The primary objective of a cost of service analysis is the proportional manner in which to collect the revenue requirement from the Department’s stormwater customers on an ERU basis. As noted, the cost of service analysis is simplified for the stormwater utility given the use of an established ERU that is applied to all customers based on the impervious square footage of each customer in relation to the square footage identified by the Department as 2,347 sq. ft. per ERU.
This results in the development of proposed stormwater rates that properly reflect the costs incurred by the Department and impacts customers place on the stormwater system.
4.2 General Cost of Service Procedures
In order to determine the proportional cost to serve each customer on the Department’s stormwater system, a cost of service analysis is conducted. For the Department’s cost of service analysis, the process was abbreviated as the total costs are shared by customers based on the total number of ERUs. T he stormwater cost of service analysis consisted of dividing the total revenue requirement by the total number of billed ERUs given the establishment of an ERU by the Department.
4.3 Summary of the Stormwater Cost of Service Analysis
In summary, the cost of service analysis began by taking the FY 202 7 revenue requirement and total billed ERUs . Then, the unit cost per ERU was calculated by dividing the total revenue requirement by the total billed ERUs. Provided in Table 4 – 1 is a summary of the distribution of the revenue requirement to the equivalent residential units.
ATTACHMENT A
Table 4 – 1
Summary of the FY 2027 Stormwater Cost of Service Analysis
FY 2027
Current Rate
Revenues
FY 2027
Revenue
Requirement
$
Difference
All Customers $6,127,822 $11,226,171 $5,098,348
Equivalent Residential Units 243,168 243,168
$/ERU/Month $2.10 $3.85 $1.75
The results of the cost of service analysis indicate the need to increase the rate per ERU in FY 2027 to reflect the costs of providing stormwater service on a per ERU basis. The development of the stormwater cost per ERU is provided in Exhibits 6 through 13 of the Stormwater Technical Appendix.
4.4 Consultant’s Conclusions and Recommendations
The results of the cost of service analysis reflect the results of the revenue requirement and indicate the need for an increase in the stormwater rate per ERU. Given this, HDR recommends the Department adjust the stormwater rate to reflect the results of the cost of service analysis on a per ERU basis.
ATTACHMENT A
5 Stormwater Rate Design Analysis
5.1 Introduction
The final step of the Department’s comprehensive stormwater rate study is the design of rates to collect the appropriate level of revenues based on the results of the revenue requirement and cost of service analyses. In reviewing the Department’s rates, consideration is given to the level of the rates and the structure of the rates as developed in the prior two analyses.
5.2 Rate Design Criteria and Considerations
Rates must be set in accordance with Proposition 218, and in a manner that proportionally allocates the utility’s cost of service to each parcel through their respective rates. A utility may consider additional criteria, provided they do not result in rate s that are not based on the proportional cost of service. Some of these rate design criteria are listed below:
Rates which are easy to understand from the customer’s perspective Rates which are easy for the utility to administer
Consideration of the customer’s ability to pay
Continuity, over time, of the rate making philosophy
Policy considerations (encourage efficient use, economic development, etc.) Provide revenue stability from month to month and year to year Promote efficient allocation of the resource
Non-discriminatory (cost-based)
Compliant with State law
The Department may consider various cost-based rate structures that have incidental benefits of sending proper price signals as to what their usage or volumetric contributions are costing. This goal may be approached through rate level and structure, provided the resulting rates reflect the proportional cost of service . When developing the proposed rate designs, all the above -listed criteria can be taken into consideration. However, it should be noted that it is difficult, if not impossible, to design a rat e that meets all the goals and objectives listed above. For example, designing a rate that is cost- based may not reflect the customer’s ability to pay. In designing rates, there are always trade-offs between these goals and objectives.
5.3 Development of Cost-Based Stormwater Rates
Calculating cost-based and proportional rates is of paramount importance in d eveloping the proposed stormwater rates. While always a key consideration in developing rates, meeting the legal requirements and documenting the steps taken to meet said requirements has been in the forefront with the recent legal challenges in the State of California on utility rates. Given this, the Department’s proposed stormwater rates have been developed to meet the legal requirements of California Constitution Article XIII D, Section 6 (Article XIII D). A key component of Article XIII D is the development of rates which reflect the cost of providing service and are proportionate ly distributed between the customer classes of service and the customers within each class . HDR would point out that there is no single methodology for equitably assigning costs to the customer
ATTACHMENT A
classes of service. Article XIII D is not prescriptive and does not provide a specific methodology for establishing rates. Given that, HDR developed the Department’s proposed stormwater rates based on generally accepted rate setting methodologies to meet the requirements of Article XIII D.
HDR is of the opinion that the proposed rates meet the legal requirements of Article XIII D . HDR reaches this conclusion based upon the following:
The revenue derived from stormwater rates do es not exceed the funds required to provide the property related service (i.e., stormwater service). The proposed rates are designed to collect the overall revenue requirement of the Department’s stormwater system.
The revenues derived from stormwater rates shall not be used for any purpose other than that for which the fee or charge is imposed. The revenues derived from the Department’s stormwater rates are used exclusively to operate , maintain and fund the Department’s stormwater system.
The amount of a fee or charge imposed upon a parcel or person as an incident of property ownership shall not exceed the proportional costs of the service attributable to the parcel. Section 4 of th e S tudy focused exclusively on the issue of proportional assignment of costs on an equivalent unit basis . The proposed rates have appropriately distributed costs on a per ERU basis to reflect the costs of providing stormwater services (i.e., the benefits they receive from and burdens they place on the system) based on the square footage of impervious area of a given parcel. Utilizing ERUs establishes the proportionality expected under Proposition 218 by developing an equivalent unit that is applied to all customers, which reflects the manner in which these costs are incurred by the Department and the impacts stormwater customers place on the system.
5.4 Overview of the Present and Proposed Stormwater
Rates
The Department currently has a single monthly flat rate for all customers on a per ERU basis. For the City, the basis for one ERU for the residential class of service is 2,347 sq. ft of impervious surface area. Residential customers include Single -Family, Condominiums, Multi -Family and Apartments. A non -residential customer is classified as Commercial, Industrial, or Institutional.
Each of the non-residential customers’ monthly bills are calculated using the same method, but each class is adjusted by the density of development factor depending on the customer class. As stated previously, the density of development factor is a percentage applied to the gross parcel area used to determine a customer’s number of ERUs. The density of development factor for a Commercial customer is 90%, Institutional is 62%, and Industrial is 79% based on the Department’s approach . These factors are used to determine the Commercial, Industrial, or Institutional customer ERUs, which are then multiplied by the rate per ERU for the total monthly non-residential charge for a given parcel.
ATTACHMENT A
Given the results of the revenue requirement and cost of service analyses, a proposed stormwater rate has been developed that reflects the proportional distribution of the costs of providing stormwater service to the Department’s customers on a per ERU basis. It is important to note that the structure, based on an ERU, of the proposed stormwater rate is recommended to be maintained at this time. Therefore, only the level of the rate has been adjusted to meet the revenue requirement of the Department’s stormwater utility. Furthermore, the rate for FY 2027 is based on the unit cost developed in the cost of service analysis. The proposed stormwater rate, thereafter, is increased by the annual revenue requirement adjustment to recover the revenues to support the identified O&M and capital expenses in each year.
Provided in Table 5 – 1 is a summary of the current and proposed stormwater rates for the Department’s stormwater utility.
Table 5 – 1
Summary of the Present and Proposed Stormwater Rates
Present
Rates FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
$/ERU
Rate Per Equivalent Unit $2.10 $3.85 $5.60 $6.85 $7.85 $8.10
5.5 Summary of the Stormwater Rate Study
This completes the analysis for the Department’s stormwater utility . This Study has provided a comprehensive review and development of proposed stormwater rates . Based on the Department’s system and customer characteristics, the proposed stormwater rates appropriately reflect the cost to provide service and are proportionally distributed to the total billed ERUs. Full and complete technical appendices of the development of the comprehensive stormwater rate study and the proposed revenue adjustments can be found in the Technical Appendix of this report.
The Study was developed based on existing operating expenses and the adopted capital plan, along with assumptions of cost escalation and customer growth as examples. Should the assumptions or data change, the Study should be revisited and updated to reflect these changes to maintain cost-based and proportional stormwater rates.
ATTACHMENT A
Technical Appendix A – Stormwater Analysis
ATTACHMENT A
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 Revenues
Total Rate Revenues $6,067,001 $6,097,336 $6,127,822 $6,158,462 $6,189,254 $6,220,200 $6,251,301 $6,282,558 $6,313,970 Total Miscellaneous Revenue 922,274 947,597 894,867 919,738 935,267 975,846 1,026,866 1,048,340 1,085,150 ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Revenues $6,989,275 $7,044,932 $7,022,689 $7,078,200 $7,124,521 $7,196,046 $7,278,167 $7,330,898 $7,399,120 Expenses
Total O & M Expense $7,532,340 $9,196,577 $10,149,202 $10,515,797 $10,897,478 $11,290,642 $11,700,101 $12,126,676 $12,571,237 Total Taxes and Transfers 0 0 0 0 0 0 0 0 0
Net CIP From Rates 0 0 950,000 6,625,000 10,025,000 12,740,000 13,250,000 13,725,000 14,190,000 Net Debt Service 0 0 0 0 0 0 0 0 0
General Fund Back Payment 0 0 0 0 0 0 0 0 0
---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Application of Funds $7,532,340 $9,196,577 $11,099,202 $17,140,797 $20,922,478 $24,030,642 $24,950,101 $25,851,676 $26,761,237 Total Reserve Funding ($543,065) ($2,151,645) $1,021,836 $194,690 $206,130 $202,481 $198,282 $190,295 $196,070 Total Revenue Requirement $6,989,275 $7,044,932 $12,121,038 $17,335,487 $21,128,608 $24,233,123 $25,148,383 $26,041,971 $26,957,306 Bal. /(Def.) of Funds $0 $0 ($5,098,348) ($10,257,287) ($14,004,087) ($17,037,076) ($17,870,216) ($18,711,073) ($19,558,186) Debt Service Coverage Ratio (all debt, including taxes and transfers) Before Rate Adjustment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 After Proposed Rate Adjustment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Ending Fund Balance $8,387,043 $4,088,902 $5,280,976 $5,567,168 $5,606,565 $8,381,954 $8,980,051 $9,170,346 $7,647,127 Exhibit 1
Summary of the Revenue Requirement
Stormwater Rate Study
City of Stockton
ATTACHMENT A
City of Stockton
Stormwater Rate Study
Escalation Factors
Exhibit 2
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 Revenues
Customer Growth 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% Miscellaneous Revenues 1.0% 1.0% 1.0% 1.0% 1.0% 1.5% 1.5% 1.5% 1.5% 1.5% Expenses
Labor Budget Budget 22.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Provided by Budget Office Benefits - Medical Budget Budget 22.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Provided by Budget Office Benefits - Retirement Budget Budget 25.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% Provided by Budget Office Benefits - Other Budget Budget 22.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Provided by Budget Office Materials & Supplies Budget Budget 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% Equipment Budget Budget 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% Miscellaneous Budget Budget 2.8% 2.8% 2.8% 2.8% 2.8% 2.8% 2.8% 2.8% Utilities Budget Budget 4.0% 4.0% 4.0% 3.5% 3.5% 3.5% 3.5% 3.5% CIP Budget 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Insurance Budget Budget 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% Provided by Budget Office Interest 2.3% 2.3% 2.3% 2.3% 2.3% 2.3% 2.3% 2.3% 2.3%
New Debt Service Assumptions
Revenue Bond
Term in Years 30 30 30 30 30 30 30 30 30 30
Rate 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
Notes
ATTACHMENT A
City of Stockton
Stormwater Rate Study Page 1 of 7
Revenue Requirement Analysis
Exhibit 3
Proj Yr End Budget
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 Revenues
Rate Revenues
Residential $2,508,761 $2,521,305 $2,533,911 $2,546,581 $2,559,314 $2,572,110 $2,584,971 $2,597,896 $2,610,885 $2,623,939 Customer Growth Non-Residential 3,558,240 3,576,031 3,593,911 3,611,881 3,629,940 3,648,090 3,666,330 3,684,662 3,703,085 3,721,601 Customer Growth ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Rate Revenues Total Rate Revenues $6,067,001 $6,097,336 $6,127,822 $6,158,462 $6,189,254 $6,220,200 $6,251,301 $6,282,558 $6,313,970 $6,345,540 Miscellaneous Revenue
Interest Income $175,000 $168,277 $107,754 $124,754 $132,333 $160,868 $199,663 $208,730 $232,945 $180,632 Calculated on Reserves Commercial Fse Inspct FeeCommercial Fse Inspct Fee 60,000 70,000 70,700 71,407 72,121 73,203 74,301 75,415 76,547 77,695 Miscellaneous Revenues Construction InspectionsConstruction Inspections 90,000 100,000 101,000 102,010 103,030 104,576 106,144 107,736 109,352 110,993 Miscellaneous Revenues Sw Qualty Cntrl Crit PlanSw Qualty Cntrl Crit Plan 19,719 20,000 20,200 20,402 20,606 20,915 21,229 21,547 21,870 22,199 Miscellaneous Revenues Admin Fee Storm DrainsAdmin Fee Storm Drains 110,569 117,176 118,348 119,531 120,727 122,537 124,376 126,241 128,135 130,057 Miscellaneous Revenues Agency ReimbursementsAgency Reimbursements 360,800 371,444 375,158 378,910 382,699 388,440 394,266 400,180 406,183 412,276 Miscellaneous Revenues Fines & Penalties 106,186 100,700 101,707 102,724 103,751 105,308 106,887 108,491 110,118 111,770 Miscellaneous Revenues -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- Total Miscellaneous RevenueTotal Miscellaneous Revenue $922,274 $947,597 $894,867 $919,738 $935,267 $975,846 $1,026,866 $1,048,340 $1,085,150 $1,045,620 Total Revenues $6,989,275 $7,044,932 $7,022,689 $7,078,200 $7,124,521 $7,196,046 $7,278,167 $7,330,898 $7,399,120 $7,391,160 Notes
Projected
ATTACHMENT A
City of Stockton
Stormwater Rate Study Page 2 of 7
Revenue Requirement Analysis
Exhibit 3
Proj Yr End Budget
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 Notes Projected
Expenses
Utility Billing
Utility BillingSalaries - RegularSalaries - Regular $145,591 $150,288 $183,351 $188,852 $194,517 $200,353 $206,364 $212,554 $218,931 $225,499 Labor Utility BillingSalaries - Part Time/TempSalaries - Part Time/Temp 5,930 6,230 7,601 7,829 8,063 8,305 8,555 8,811 9,076 9,348 Labor Utility BillingRegular OvertimeRegular Overtime 2,539 5,740 7,003 7,213 7,429 7,652 7,882 8,118 8,362 8,613 Labor Utility BillingHoliday PayHoliday Pay 738 0 0 0 0 0 0 0 0 0 Labor Utility BillingVacation Sell BackVacation Sell Back 360 304 371 382 393 405 417 430 443 456 Benefits - Other Utility BillingEmployee Separation PayEmployee Separation Pay 2,181 2,250 2,745 2,827 2,912 3,000 3,090 3,182 3,278 3,376 Benefits - Other Utility BillingAdditional PayAdditional Pay 723 134 163 168 173 179 184 190 195 201 Benefits - Other Utility BillingRetirementRetirement 42,226 46,691 58,364 61,866 65,578 69,512 73,683 78,104 82,790 87,758 Benefits - Retirement Utility BillingDeferred CompensationDeferred Compensation 988 0 0 0 0 0 0 0 0 0 Benefits - Other Utility BillingMedicare Medicare 2,595 2,352 2,869 2,956 3,044 3,136 3,230 3,326 3,426 3,529 Benefits - Medical Utility BillingHealth/Dental/VisionHealth/Dental/Vision 42,294 34,216 41,744 42,996 44,286 45,614 46,983 48,392 49,844 51,339 Benefits - Medical Utility BillingL/T Disability InsuranceL/T Disability Insurance 1,059 945 1,153 1,187 1,223 1,260 1,298 1,337 1,377 1,418 Benefits - Other Utility BillingLife InsuranceLife Insurance 158 130 159 163 168 173 179 184 189 195 Benefits - Other Utility BillingWorkers CompensationWorkers Compensation 5,387 4,619 5,635 5,804 5,978 6,158 6,342 6,533 6,729 6,931 Benefits - Other Utility BillingUnemployment InsuranceUnemployment Insurance 184 161 196 202 208 215 221 228 235 242 Benefits - Other Utility BillingCell Phone AllowanceCell Phone Allowance 248 135 165 170 175 180 185 191 197 203 Benefits - Other Utility BillingInsurance PremiumsInsurance Premiums 15,008 20,954 22,840 24,895 27,136 29,578 32,240 35,142 38,305 41,752 Insurance Utility BillingComputer/Tech/Oper SupportComputer/Tech/Oper Support 20,200 19,775 20,408 21,061 21,735 22,430 23,148 23,889 24,653 25,442 Materials & Supplies Utility BillingContractual EmployeesContractual Employees 6,717 7,070 7,296 7,530 7,771 8,019 8,276 8,541 8,814 9,096 Materials & Supplies Utility BillingComputer Programming ServicesComputer Programming Services 1,224 1,288 1,329 1,372 1,416 1,461 1,508 1,556 1,606 1,657 Materials & Supplies Utility BillingOther ServicesOther Services 132,411 139,380 143,840 148,443 153,193 158,095 163,154 168,375 173,763 179,324 Materials & Supplies Utility BillingDuplication/Copy CostsDuplication/Copy Costs 2,216 2,333 2,408 2,485 2,564 2,646 2,731 2,818 2,909 3,002 Materials & Supplies Utility BillingPublicity & AdvertisingPublicity & Advertising 120 126 130 134 138 143 147 152 157 162 Materials & Supplies Utility BillingPrinting & MappingPrinting & Mapping 16,015 16,858 17,397 17,954 18,529 19,122 19,734 20,365 21,017 21,689 Materials & Supplies Utility BillingPostage/Mailing ServicesPostage/Mailing Services 77,852 81,949 84,571 87,278 90,071 92,953 95,927 98,997 102,165 105,434 Materials & Supplies Utility BillingMaint & Repair ServicesMaint & Repair Services 1,074 1,130 1,166 1,203 1,242 1,282 1,323 1,365 1,409 1,454 Materials & Supplies Utility BillingPool Vehicle RentalPool Vehicle Rental 106 112 116 119 123 127 131 135 140 144 Materials & Supplies Utility BillingProcessing FeesProcessing Fees 13,876 14,606 15,073 15,556 16,054 16,567 17,097 17,645 18,209 18,792 Materials & Supplies Utility BillingCollection CostsCollection Costs 15,352 16,160 16,677 17,211 17,762 18,330 18,916 19,522 20,146 20,791 Materials & Supplies Utility BillingTelephone Telephone 159 167 172 178 184 189 195 202 208 215 Materials & Supplies Utility BillingMaterials and SuppliesMaterials and Supplies 960 1,044 1,077 1,111 1,147 1,184 1,222 1,261 1,301 1,343 Materials & Supplies Utility BillingComputer SoftwareComputer Software 1,207 1,435 1,481 1,528 1,577 1,628 1,680 1,734 1,789 1,846 Materials & Supplies Utility BillingFuels - Gasoline and PropaneFuels - Gasoline and Propane 909 957 988 1,019 1,052 1,086 1,120 1,156 1,193 1,231 Materials & Supplies Utility BillingTraining ServicesTraining Services 2,303 2,424 2,502 2,582 2,664 2,749 2,837 2,928 3,022 3,119 Materials & Supplies Utility BillingMeetings and TravelMeetings and Travel 312 328 338 349 361 372 384 396 409 422 Materials & Supplies Utility BillingMembershipsMemberships 118 124 128 132 136 141 145 150 155 160 Materials & Supplies Utility BillingCar Mileage ReimbursementCar Mileage Reimbursement 76 80 98 101 104 107 110 113 117 120 Benefits - Other Utility BillingSettlement PaymentsSettlement Payments 11,742 4,283 4,403 4,526 4,653 4,783 4,917 5,055 5,196 5,342 Miscellaneous Utility BillingTRAVEL TRAVEL 0 0 0 0 0 0 0 0 0 0 Miscellaneous Utility BillingComputer/Programming SvcsComputer/Programming Svcs 7,600 4,750 4,883 5,020 5,160 5,305 5,453 5,606 5,763 5,924 Miscellaneous ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- Total Utility Billing $580,758 $591,528 $660,840 $684,402 $708,919 $734,438 $761,008 $788,682 $817,515 $847,567 Total Utility Billing ExpensesTotal Utility Billing Expenses $580,758 $591,528 $660,840 $684,402 $708,919 $734,438 $761,008 $788,682 $817,515 $847,567
ATTACHMENT A
City of Stockton
Stormwater Rate Study Page 3 of 7
Revenue Requirement Analysis
Exhibit 3
Proj Yr End Budget
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 Notes Projected
Administration
AdministrationEmployee ServicesEmployee Services
AdministrationSalaries - RegularSalaries - Regular $545,995 $621,200 $757,864 $780,600 $804,018 $828,138 $852,983 $878,572 $904,929 $932,077 Labor AdministrationSalaries - Part Time/TempSalaries - Part Time/Temp 1,445 0 0 0 0 0 0 0 0 0 Labor AdministrationRegular OvertimeRegular Overtime 8,629 18,280 22,302 22,971 23,660 24,370 25,101 25,854 26,629 27,428 Labor AdministrationHoliday PayHoliday Pay 4,917 3,500 4,270 4,398 4,530 4,666 4,806 4,950 5,099 5,252 Benefits - Other AdministrationVacation Sell BackVacation Sell Back 1,701 2,345 2,861 2,947 3,035 3,126 3,220 3,317 3,416 3,519 Benefits - Other AdministrationEmployee Separation PayEmployee Separation Pay 6,899 9,175 11,194 11,529 11,875 12,231 12,598 12,976 13,366 13,767 Labor AdministrationAdditional PayAdditional Pay 520 296 361 372 383 395 406 419 431 444 Labor AdministrationRetirementRetirement 126,544 192,180 240,225 254,639 269,917 286,112 303,279 321,475 340,764 361,210 Benefits - Retirement AdministrationDeferred CompensationDeferred Compensation 13,086 14,107 17,211 17,727 18,259 18,806 19,371 19,952 20,550 21,167 Benefits - Other AdministrationMedicareMedicare 6,444 8,209 10,015 10,315 10,625 10,944 11,272 11,610 11,958 12,317 Benefits - Medical AdministrationMedicare/Social SecurityMedicare/Social Security 0 1,184 1,444 1,488 1,532 1,578 1,626 1,675 1,725 1,777 Benefits - Medical AdministrationHealth/Dental/VisionHealth/Dental/Vision 64,096 102,157 124,632 128,370 132,222 136,188 140,274 144,482 148,817 153,281 Benefits - Medical AdministrationL/T Disability InsuranceL/T Disability Insurance 2,072 3,921 4,784 4,927 5,075 5,227 5,384 5,546 5,712 5,883 Benefits - Other AdministrationLife InsuranceLife Insurance 344 421 514 529 545 561 578 595 613 632 Benefits - Other AdministrationWorkers CompensationWorkers Compensation 13,013 14,262 17,400 17,922 18,459 19,013 19,583 20,171 20,776 21,399 Benefits - Other AdministrationUnemployment InsuranceUnemployment Insurance 554 648 791 814 839 864 890 916 944 972 Benefits - Other AdministrationCell Phone AllowanceCell Phone Allowance 3,244 1,932 2,357 2,428 2,501 2,576 2,653 2,732 2,814 2,899 Benefits - Other AdministrationSettlement PaymentsSettlement Payments 9,720 8,003 9,764 10,057 10,358 10,669 10,989 11,319 11,658 12,008 Benefits - Other -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- AdministrationTotal Employee ServicesTotal Employee Services $809,223 $1,001,820 $1,227,986 $1,272,032 $1,317,832 $1,365,465 $1,415,012 $1,466,561 $1,520,202 $1,576,031 AdministrationOther ServicesOther Services
AdministrationMaintenance & Repair ServicesMaintenance & Repair Services $1,130 $2,175 $2,654 $2,733 $2,815 $2,900 $2,987 $3,076 $3,168 $3,263 Labor AdministrationDuplication/Copy CostsDuplication/Copy Costs 1,535 3,035 3,120 3,207 3,297 3,389 3,484 3,582 3,682 3,785 Miscellaneous AdministrationInsurance PremiumsInsurance Premiums 44,626 84,793 92,424 100,743 109,809 119,692 130,465 142,206 155,005 168,955 Insurance AdministrationAutomotive Equipment RentalAutomotive Equipment Rental 1,169 17,157 17,706 18,273 18,857 19,461 20,084 20,726 21,389 22,074 Materials & Supplies AdministrationComputer/Tech/Operation SupportComputer/Tech/Operation Support 21,876 10,153 12,387 12,758 13,141 13,535 13,941 14,360 14,790 15,234 Labor AdministrationTelephone RentalTelephone Rental 5,953 8,302 8,568 8,842 9,125 9,417 9,718 10,029 10,350 10,681 Materials & Supplies AdministrationRadio Equipment RentalRadio Equipment Rental 183 200 206 213 220 227 234 242 249 257 Materials & Supplies AdministrationEquipment Repairs/MaintEquipment Repairs/Maint 0 240 248 256 264 272 281 290 299 309 Materials & Supplies AdministrationTelecommunicationsTelecommunications 0 150 156 162 169 175 181 187 194 200 Utilities AdministrationOther RentalsOther Rentals 711,217 711,126 733,882 757,366 781,602 806,613 832,425 859,062 886,552 914,922 Materials & Supplies AdministrationProcessing FeesProcessing Fees 1,015 7,175 7,405 7,642 7,886 8,138 8,399 8,668 8,945 9,231 Materials & Supplies AdministrationTesting & Analysis ServicesTesting & Analysis Services 21 547 565 583 601 620 640 661 682 704 Materials & Supplies AdministrationUniform/Laundry ServicesUniform/Laundry Services 2,584 4,584 4,731 4,882 5,038 5,200 5,366 5,538 5,715 5,898 Materials & Supplies AdministrationPublicity & AdvertisingPublicity & Advertising 2,500 4,565 4,693 4,824 4,959 5,098 5,241 5,388 5,539 5,694 Miscellaneous AdministrationPostage/Mailing ServicesPostage/Mailing Services 101 315,022 60,000 61,920 63,901 65,946 68,057 70,234 72,482 74,801 Materials & Supplies AdministrationReprographicsReprographics 0 30 31 32 33 34 35 36 37 39 Materials & Supplies AdministrationLegal ServicesLegal Services 7,880 10,700 13,054 13,446 13,849 14,264 14,692 15,133 15,587 16,055 Labor AdministrationProfessional & Special ServicesProfessional & Special Services 459,480 515,718 629,176 648,051 667,493 687,518 708,143 729,387 751,269 773,807 Labor AdministrationTravel Travel 0 150 155 160 165 170 176 181 187 193 Materials & Supplies -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- AdministrationTotal Other Services Total Other Services $1,261,270 $1,695,822 $1,591,159 $1,646,092 $1,703,225 $1,762,670 $1,824,548 $1,888,986 $1,956,123 $2,026,103
ATTACHMENT A
City of Stockton
Stormwater Rate Study Page 4 of 7
Revenue Requirement Analysis
Exhibit 3
Proj Yr End Budget
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 Notes Projected
Materials & Supplies
AdministrationMaterials & SuppliesMaterials & Supplies $11,995 $11,160 $11,517 $11,886 $12,266 $12,659 $13,064 $13,482 $13,913 $14,358 Materials & Supplies AdministrationComputer SoftwareComputer Software 65,000 40,035 41,316 42,638 44,003 45,411 46,864 48,364 49,911 51,508 Materials & Supplies AdministrationSubscription - PeriodicalSubscription - Periodical 250 500 516 533 550 567 585 604 623 643 Materials & Supplies AdministrationWater Water 0 0 0 0 0 0 0 0 0 0 Materials & Supplies AdministrationTelephoneTelephone 3,404 4,407 4,548 4,694 4,844 4,999 5,159 5,324 5,494 5,670 Materials & Supplies AdministrationTechnology and CommunicationsTechnology and Communications 0 0 0 0 0 0 0 0 0 0 Materials & Supplies AdministrationFuels - Gas/Oil/PropaneFuels - Gas/Oil/Propane 200 1,264 1,315 1,367 1,422 1,472 1,523 1,576 1,632 1,689 Utilities AdministrationFuel Fuel 3,200 4,293 4,464 4,643 4,829 4,998 5,173 5,354 5,541 5,735 Utilities AdministrationLibrary MaterialsLibrary Materials 250 500 516 533 550 567 585 604 623 643 Materials & Supplies -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- AdministrationTotal Materials & SuppliesTotal Materials & Supplies $84,299 $62,159 $64,192 $66,293 $68,462 $70,672 $72,953 $75,307 $77,738 $80,247 AdministrationOther ExpensesOther Expenses
AdministrationTraining Training $8,700 $11,920 $12,254 $12,597 $12,950 $13,312 $13,685 $14,068 $14,462 $14,867 Miscellaneous AdministrationMeeting & TravelMeeting & Travel 500 535 550 565 581 597 614 631 649 667 Miscellaneous AdministrationMembershipsMemberships 234 59 61 62 64 66 68 70 72 74 Miscellaneous AdministrationIndirect Cost AllocationIndirect Cost Allocation 171,547 171,547 177,037 182,702 188,548 194,582 200,808 207,234 213,866 220,709 Materials & Supplies AdministrationNon-Capital AssetsNon-Capital Assets 5,000 5,000 5,140 5,284 5,432 5,584 5,740 5,901 6,066 6,236 Miscellaneous -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- AdministrationTotal Other ExpensesTotal Other Expenses $185,981 $189,061 $195,041 $201,210 $207,575 $214,141 $220,915 $227,904 $235,115 $242,553 Total Administration ExpensesTotal Administration Expenses $2,340,773 $2,948,862 $3,078,378 $3,185,627 $3,297,094 $3,412,948 $3,533,428 $3,658,759 $3,789,177 $3,924,934 Storm Pump Stations
Storm Pump StationsEmployee ServicesEmployee Services
Storm Pump StationsSalaries - RegularSalaries - Regular $1,113,405 $1,622,157 $1,979,032 $2,038,402 $2,099,555 $2,162,541 $2,227,417 $2,294,240 $2,363,067 $2,433,959 Labor Storm Pump StationsSalaries - Part Time/TempSalaries - Part Time/Temp 4,589 4,900 5,978 6,157 6,342 6,532 6,728 6,930 7,138 7,352 Labor Storm Pump StationsRegular OvertimeRegular Overtime 59,551 60,410 73,700 75,911 78,189 80,534 82,950 85,439 88,002 90,642 Labor Storm Pump StationsStand By TimeStand By Time 48,386 69,900 85,278 87,836 90,471 93,186 95,981 98,861 101,826 104,881 Labor Storm Pump StationsHoliday PayHoliday Pay 5,807 5,981 7,297 7,516 7,741 7,973 8,213 8,459 8,713 8,974 Labor Storm Pump StationsEmployee Separation PayEmployee Separation Pay 3,077 5,614 6,849 7,055 7,266 7,484 7,709 7,940 8,178 8,424 Labor Storm Pump StationsSeparation PaySeparation Pay 9,799 16,991 20,729 21,351 21,991 22,651 23,331 24,031 24,752 25,494 Labor Storm Pump StationsAdditional PayAdditional Pay 8,681 7,014 8,557 8,814 9,078 9,351 9,631 9,920 10,218 10,524 Labor Storm Pump StationsRetirementRetirement 276,248 506,180 632,725 670,689 710,930 753,586 798,801 846,729 897,533 951,384 Benefits - Retirement Storm Pump StationsRetirement ExpenseRetirement Expense 2,226 2,000 2,440 2,513 2,589 2,666 2,746 2,829 2,913 3,001 Benefits - Other Storm Pump StationsDeferred CompensationDeferred Compensation 42,545 62,996 76,855 79,161 81,536 83,982 86,501 89,096 91,769 94,522 Benefits - Other Storm Pump StationsMedicareMedicare 14,408 24,449 29,828 30,723 31,644 32,594 33,571 34,579 35,616 36,684 Benefits - Medical Storm Pump StationsMedicare/Social SecurityMedicare/Social Security 0 312 381 392 404 416 428 441 455 468 Benefits - Medical Storm Pump StationsHealth/Dental/VisionHealth/Dental/Vision 216,544 295,859 360,948 371,776 382,930 394,418 406,250 418,438 430,991 443,920 Benefits - Medical Storm Pump StationsL/T Disability InsuranceL/T Disability Insurance 3,362 7,481 9,127 9,401 9,683 9,973 10,272 10,580 10,898 11,225 Benefits - Other Storm Pump StationsLife InsuranceLife Insurance 831 1,269 1,548 1,595 1,642 1,692 1,742 1,795 1,849 1,904 Benefits - Other Storm Pump StationsWorkers CompensationWorkers Compensation 66,618 91,681 111,851 115,206 118,663 122,222 125,889 129,666 133,556 137,562 Benefits - Other Storm Pump StationsRecruitment IncentiveRecruitment Incentive 185 0 0 0 0 0 0 0 0 0 Benefits - Other Storm Pump StationsUnemployment InsuranceUnemployment Insurance 1,251 1,703 2,078 2,140 2,204 2,270 2,338 2,409 2,481 2,555 Benefits - Other Storm Pump StationsCell Phone AllowanceCell Phone Allowance 3,682 3,561 4,344 4,475 4,609 4,747 4,890 5,036 5,187 5,343 Benefits - Other Storm Pump StationsAllowancesAllowances 97 90 110 113 116 120 124 127 131 135 Benefits - Other Storm Pump StationsVacation Sell BackVacation Sell Back 1,523 1,953 2,383 2,454 2,528 2,604 2,682 2,762 2,845 2,930 Benefits - Other Storm Pump StationsSettlement PaymentsSettlement Payments 46,071 49,652 60,575 62,393 64,264 66,192 68,178 70,224 72,330 74,500 Benefits - OtherStorm Pump Stations -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- Storm Pump StationsTotal Employee ServicesTotal Employee Services $1,928,886 $2,842,153 $3,482,612 $3,606,072 $3,734,375 $3,867,734 $4,006,374 $4,150,529 $4,300,447 $4,456,386
ATTACHMENT A
City of Stockton
Stormwater Rate Study Page 5 of 7
Revenue Requirement Analysis
Exhibit 3
Proj Yr End Budget
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 Notes Projected
Other Services
Storm Pump StationsElectricityElectricity $600,000 $650,000 $676,000 $703,040 $731,162 $756,752 $783,239 $810,652 $839,025 $868,391 Utilities Storm Pump StationsGasGas 40,000 45,000 46,800 48,672 50,619 52,391 54,224 56,122 58,086 60,119 Utilities Storm Pump StationsSanitary SewerSanitary Sewer 2,500 2,500 2,600 2,704 2,812 2,911 3,012 3,118 3,227 3,340 Utilities Storm Pump StationsWaterWater 40,000 42,000 43,680 45,427 47,244 48,898 50,609 52,381 54,214 56,111 Utilities Storm Pump StationsTelephoneTelephone 23,304 28,055 29,177 30,344 31,558 32,663 33,806 34,989 36,214 37,481 Utilities Storm Pump StationsStorm WaterStorm Water 100 0 0 0 0 0 0 0 0 0 Utilities Storm Pump StationsMaintenance & Repair ServicesMaintenance & Repair Services 316,389 400,270 413,079 426,297 439,939 454,017 468,545 483,539 499,012 514,980 Materials & Supplies Storm Pump StationsEquipment Repairs/Maint.Equipment Repairs/Maint. 2,300 2,500 2,600 2,704 2,812 2,925 3,042 3,163 3,290 3,421 Equipment Storm Pump StationsSecurity and Alarm ServicesSecurity and Alarm Services 116,766 104,480 107,823 111,274 114,834 118,509 122,301 126,215 130,254 134,422 Materials & Supplies Storm Pump StationsTesting and Analysis ServicesTesting and Analysis Services 502 400 413 426 440 454 468 483 499 515 Materials & Supplies Storm Pump StationsInsurance PremiumsInsurance Premiums 99,167 223,690 243,822 265,766 289,685 315,757 344,175 375,151 408,914 445,716 Insurance Storm Pump StationsAutomotive Equipment RentalAutomotive Equipment Rental 19,173 13,504 13,936 14,382 14,842 15,317 15,807 16,313 16,835 17,374 Materials & Supplies Storm Pump StationsTelephone RentalTelephone Rental 47,725 41,116 42,432 43,790 45,191 46,637 48,129 49,669 51,259 52,899 Materials & Supplies Storm Pump StationsRadio Equipment RentalRadio Equipment Rental 1,528 2,439 2,517 2,598 2,681 2,766 2,855 2,946 3,041 3,138 Materials & Supplies Storm Pump StationsOther RentalsOther Rentals 6,000 3,000 3,096 3,195 3,297 3,403 3,512 3,624 3,740 3,860 Materials & Supplies Storm Pump StationsDuplication/Copy CostsDuplication/Copy Costs 1,117 1,495 1,543 1,592 1,643 1,696 1,750 1,806 1,864 1,923 Materials & Supplies Storm Pump StationsPublicity & AdvertisingPublicity & Advertising 14,128 12,040 12,425 12,823 13,233 13,657 14,094 14,545 15,010 15,490 Materials & Supplies Storm Pump StationsPrinting & MappingPrinting & Mapping 500 250 258 266 275 284 293 302 312 322 Materials & Supplies Storm Pump StationsPrintingPrinting 0 38,500 39,732 41,003 42,316 43,670 45,067 46,509 47,997 49,533 Materials & Supplies Storm Pump StationsPostage/Mailing ServicesPostage/Mailing Services 43,256 2,590 2,673 2,758 2,847 2,938 3,032 3,129 3,229 3,332 Materials & Supplies Storm Pump StationsUniform/Laundry ServicesUniform/Laundry Services 14,373 20,270 20,919 21,588 22,279 22,992 23,728 24,487 25,270 26,079 Materials & Supplies Storm Pump StationsLaboratory ServicesLaboratory Services 45,947 13,500 13,932 14,378 14,838 15,313 15,803 16,308 16,830 17,369 Materials & Supplies Storm Pump StationsTechnology and CommunicationsTechnology and Communications 1,039 1,137 1,173 1,211 1,250 1,290 1,331 1,374 1,417 1,463 Materials & Supplies Storm Pump StationsTraining ServicesTraining Services 18,752 24,316 25,094 25,897 26,726 27,581 28,464 29,374 30,314 31,285 Materials & Supplies Storm Pump StationsProcessing FeesProcessing Fees 155,762 176,217 181,151 186,223 191,438 196,798 202,308 207,973 213,796 219,782 Miscellaneous Storm Pump StationsComputer/Tech/Operations SupportComputer/Tech/Operations Support 24,168 31,527 38,463 39,617 40,805 42,029 43,290 44,589 45,927 47,305 Labor Storm Pump StationsMembershipsMemberships 1,940 3,267 3,372 3,479 3,591 3,706 3,824 3,947 4,073 4,203 Materials & Supplies Storm Pump StationsProfessional & Special ServicesProfessional & Special Services 122,684 91,430 93,990 96,622 99,327 102,108 104,967 107,906 110,928 114,034 Miscellaneous Storm Pump StationsOther ServicesOther Services 100,000 175,000 179,900 184,937 190,115 195,439 200,911 206,536 212,319 218,264 MiscellaneousStorm Pump Stations -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- Storm Pump StationsTotal Other Services Total Other Services $1,859,120 $2,150,493 $2,242,600 $2,333,014 $2,427,798 $2,522,897 $2,622,586 $2,727,151 $2,836,897 $2,952,153 Storm Pump Stations
Materials & Supplies
Storm Pump StationsMaterials & SuppliesMaterials & Supplies $87,960 $103,530 $106,843 $110,262 $113,790 $117,432 $121,189 $125,067 $129,070 $133,200 Materials & Supplies Storm Pump StationsComputer SoftwareComputer Software 66,791 51,685 53,339 55,046 56,807 58,625 60,501 62,437 64,435 66,497 Materials & Supplies Storm Pump StationsNon-Capital AssetsNon-Capital Assets 46,138 137,520 141,921 146,462 151,149 155,986 160,977 166,128 171,445 176,931 Materials & Supplies Storm Pump StationsBuilding & StructuresBuilding & Structures 80,000 75,000 77,400 79,877 82,433 85,071 87,793 90,602 93,502 96,494 Materials & Supplies Storm Pump StationsCommunity/ProgramCommunity/Program 1,000 2,500 2,580 2,663 2,748 2,836 2,926 3,020 3,117 3,216 Materials & Supplies Storm Pump StationsVehicle AcquisitionVehicle Acquisition 264,317 55,050 56,812 58,630 60,506 62,442 64,440 66,502 68,630 70,826 Materials & Supplies Storm Pump StationsEquipment AcquisitionEquipment Acquisition 245,007 226,250 233,490 240,962 248,672 256,630 264,842 273,317 282,063 291,089 Materials & Supplies Storm Pump StationsSubscriptionsSubscriptions 464 55 57 59 60 62 64 66 69 71 Materials & Supplies Storm Pump StationsChemicalsChemicals 3,871 5,000 5,160 5,325 5,496 5,671 5,853 6,040 6,233 6,433 Materials & Supplies Storm Pump StationsLibrary MaterialsLibrary Materials 2,872 2,055 2,121 2,189 2,259 2,331 2,406 2,483 2,562 2,644 Materials & Supplies Storm Pump StationsFuels - Gas/Oil/PropaneFuels - Gas/Oil/Propane 14,000 1,182 1,220 1,259 1,299 1,341 1,384 1,428 1,474 1,521 Materials & Supplies Storm Pump StationsTechnology CapitalTechnology Capital 8,953 2,850 2,941 3,035 3,132 3,233 3,336 3,443 3,553 3,667 Materials & SuppliesStorm Pump Stations -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- Storm Pump StationsTotal Materials & SuppliesTotal Materials & Supplies $821,373 $662,677 $683,883 $705,767 $728,351 $751,659 $775,712 $800,535 $826,152 $852,589
ATTACHMENT A
City of Stockton
Stormwater Rate Study Page 6 of 7
Revenue Requirement Analysis
Exhibit 3
Proj Yr End Budget
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 Notes Projected
Other Expenses
Storm Pump StationsTrainingTraining $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Miscellaneous Storm Pump StationsMeetings & TravelMeetings & Travel 1,430 865 889 914 940 966 993 1,021 1,049 1,079 MiscellaneousStorm Pump Stations -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- Storm Pump StationsTotal Other ExpensesTotal Other Expenses $1,430 $865 $889 $914 $940 $966 $993 $1,021 $1,049 $1,079 Storm Pump Stations
Storm Pump StationsTotal Storm Pump Stations ExpensesTotal Storm Pump Stations Expenses $4,610,809 $5,656,188 $6,409,984 $6,645,768 $6,891,464 $7,143,256 $7,405,665 $7,679,235 $7,964,544 $8,262,206 CIP Related MUD Staff Cost $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total O&M Expenses $7,532,340 $9,196,577 $10,149,202 $10,515,797 $10,897,478 $11,290,642 $11,700,101 $12,126,676 $12,571,237 $13,034,707
22.09% 10.36% 3.61% 3.63% 3.61% 3.63% 3.65% 3.67% 3.69% Taxes & Transfers
Taxes & Transfers $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- Total Taxes Taxes & TransfersTotal Taxes Taxes & Transfers $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Rate Funded Capital $0 $0 $950,000 $6,625,000 $10,025,000 $12,740,000 $13,250,000 $13,725,000 $14,190,000 $14,300,000 FY 2022 Depr. Exp. $1,684,553 Debt Service
New Revenue Bonds New Revenue Bonds $0 $0 $0 $0 $0 $0 $0 $0 $0 $260,206 Calculated --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- Total Debt Service $0 $0 $0 $0 $0 $0 $0 $0 $0 $260,206
Less: Debt Service FundingLess: Debt Service Funding
Reserve Funding $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
--------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- Net Debt Service $0 $0 $0 $0 $0 $0 $0 $0 $0 $260,206
General Fund Back Payment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Debt Schedule Reserve Funding
To / (From) Operating Reserve [441]To / (From) Operating Reserve [441] ($543,065) ($2,151,645) $1,021,836 $194,690 $206,130 $202,481 $198,282 $190,295 $196,070 $206,268 To / (From) Capital ReserveTo / (From) Capital Reserve 0 0 0 0 0 0 0 0 0 0 --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- Total Reserve Funding Total Reserve Funding ($543,065) ($2,151,645) $1,021,836 $194,690 $206,130 $202,481 $198,282 $190,295 $196,070 $206,268 Total Revenue Requirement $6,989,275 $7,044,932 $12,121,038 $17,335,487 $21,128,608 $24,233,123 $25,148,383 $26,041,971 $26,957,306 $27,801,181 Bal. /(Def.) of Funds $0 $0 ($5,098,348) ($10,257,287) ($14,004,087) ($17,037,076) ($17,870,216) ($18,711,073) ($19,558,186) ($20,410,021)
ATTACHMENT A
City of Stockton
Stormwater Rate Study Page 7 of 7
Revenue Requirement Analysis
Exhibit 3
Proj Yr End Budget
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 Notes Projected
Debt Service Coverage Ratio (all debt, including taxes and transfers) Before Rate Adjustment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 After Proposed Rate Adjustment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 56.75 Reserve Funds
Total Beginning Balance $8,930,108 $6,240,547 $4,088,902 $5,280,976 $5,567,168 $5,606,565 $8,381,954 $8,980,051 $9,170,346 $7,647,127 Operating Reserve Fund - Stormwater (441)
Beginning Reserve Fund Balance $5,140,108 $6,240,547 $4,088,902 $5,110,738 $5,305,428 $5,511,558 $5,714,039 $5,912,321 $6,102,616 $6,298,686 Plus: To Reserve Fund 0 0 1,021,836 194,690 206,130 202,481 198,282 190,295 196,070 206,268 Less: Uses of Funds (543,065) (2,151,645) 0 0 0 0 0 0 0 0 Ending Fund Balance $4,597,043 $4,088,902 $5,110,738 $5,305,428 $5,511,558 $5,714,039 $5,912,321 $6,102,616 $6,298,686 $6,504,954 Target: 180 days of O&M $3,714,579 $4,535,298 $5,005,086 $5,185,872 $5,374,099 $5,567,988 $5,769,913 $5,980,279 $6,199,514 $6,428,075 Capital Reserve Fund
Beginning Reserve Fund Balance $3,790,000 $0 $0 $170,239 $261,740 $95,007 $2,667,915 $3,067,730 $3,067,730 $1,348,442 Plus: To Reserve Fund 0 0 170,239 91,501 0 2,572,908 399,815 0 0 0 Less: Uses of Funds 0 0 0 0 (166,733) 0 0 0 (1,719,288) (206,567) Ending Fund Balance $3,790,000 $0 $170,239 $261,740 $95,007 $2,667,915 $3,067,730 $3,067,730 $1,348,442 $1,141,875 Total Ending Balance $8,387,043 $4,088,902 $5,280,976 $5,567,168 $5,606,565 $8,381,954 $8,980,051 $9,170,346 $7,647,127 $7,646,828 Target O&M Fund Balance $3,714,579 $4,535,298 $5,005,086 $5,185,872 $5,374,099 $5,567,988 $5,769,913 $5,980,279 $6,199,514 $6,428,075 180 days of O&M Target Bal. / (Def.) $4,672,464 ($446,397) $275,891 $381,295 $232,466 $2,813,966 $3,210,138 $3,190,067 $1,447,613 $1,218,754
ATTACHMENT A
City of Stockton
Stormwater Rate Study
Capital Improvement Plan
Exhibit 4
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 Notes CIP Projects
Alexandria and 14-Mile Slough Storm Drain Pump Station $0 $0 $0 $273,182 $0 $0 $0 $0 $0 $0 Swenson Park and Five Mile (Bonniebrook) Storm PS Improv 0 0 0 819,545 0 0 0 0 0 0 Storm Drain System Emergency 0 0 265,225 273,182 281,377 289,819 298,513 307,468 316,693 326,193 West Lane and Calaveras South Storm Pump Station Improvements 0 0 0 819,545 562,754 0 0 0 0 0 Buena Vista & Smith Canal Pump Station Discharge Pipe Rehab 0 0 0 0 0 446,321 0 0 0 0 Storm Pump Station Transfer Switch 0 0 265,225 0 0 0 0 0 0 0 Rose Street Assessment and Repair 0 0 106,090 0 0 0 0 0 0 0 Total MUD Staff Cost 0 0 143,222 142,055 191,336 0 0 0 0 0 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- Total CIP Projects $0 $0 $779,762 $2,327,509 $1,035,468 $736,139 $298,513 $307,468 $316,693 $326,193 CIP Projects - State Funded
Stockton Channel Water Quailty Improvements $0 $1,300,000 $1,700,000 $0 $0 $0 $0 $0 $0 $0 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- Total CIP Projects - State Funded $0 $1,300,000 $1,700,000 $0 $0 $0 $0 $0 $0 $0 Master Plan CIP Projects
HWY 4 and San Joaquin $0 $0 $0 $0 $0 $0 $7,433,790 $7,656,804 $7,886,508 $8,123,103 1st Priority Bonnie Brook 0 0 0 4,205,990 4,332,170 4,462,135 0 0 0 0 1st Priority Boggs Tract 0 0 0 0 4,824,095 4,968,818 5,117,882 5,271,419 0 0 1st Priority Walker Turnpike Alt 1 0 0 0 0 0 0 0 0 11,706,088 12,057,271 1st Priority -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- Total Master Plan CIP Projects $0 $0 $0 $4,205,990 $9,156,265 $9,430,953 $12,551,672 $12,928,223 $19,592,596 $20,180,374 Future Unidentified Capital Projects $0 $0 $0 $0 $0 $0 $0 $489,309 $0 $0 Transfer to Capital Reserve $0 $0 $170,239 $91,501 $0 $2,572,908 $399,815 $0 $0 $0 Total Capital Improvement Projects $0 $1,300,000 $2,650,000 $6,625,000 $10,191,733 $12,740,000 $13,250,000 $13,725,000 $19,909,288 $20,506,567 Less: Other Funding Sources
Operating Reserve Fund - Stormwater (441) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Input Capital Reserve Fund 0 0 0 0 166,733 0 0 0 1,719,288 206,567 Input State Grants 0 1,300,000 1,700,000 0 0 0 0 0 0 0 Linked New Public Works Trust Fund Loans 0 0 0 0 0 0 0 0 0 0 Input New Revenue Bonds 0 0 0 0 0 0 0 0 4,000,000 6,000,000 Calculated --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- --------------- Total Less: Other Funding Sources $0 $1,300,000 $1,700,000 $0 $166,733 $0 $0 $0 $5,719,288 $6,206,567 Rate Funded Capital $0 $0 $950,000 $6,625,000 $10,025,000 $12,740,000 $13,250,000 $13,725,000 $14,190,000 $14,300,000
ATTACHMENT A
City of Stockton
Stormwater Rate Study Page 1 of 2
Revenue at Present Rates
Exhibit 5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Residential
$ / ERU
All Categories $2.10 99,554 99,554 99,554 99,554 99,554 99,554 99,554 99,554 99,554 99,554 99,554 99,554 99,554 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $2,508,761 Total Residential $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $2,508,761 Non-Residential
$ / ERU
All Categories $2.10 141,200 141,200 141,200 141,200 141,200 141,200 141,200 141,200 141,200 141,200 141,200 141,200 141,200 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- $296,520 $296,520 $296,520 $296,520 $296,520 $296,520 $296,520 $296,520 $296,520 $296,520 $296,520 $296,520 $3,558,240 Total Non-Residential $296,520 $296,520 $296,520 $296,520 $296,520 $296,520 $296,520 $296,520 $296,520 $296,520 $296,520 $296,520 $3,558,240
ATTACHMENT A
City of Stockton
Stormwater Rate Study Page 2 of 2
Revenue at Present Rates
Exhibit 5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Summary
ERUs
Residential 99,554 99,554 99,554 99,554 99,554 99,554 99,554 99,554 99,554 99,554 99,554 99,554 99,554 Non-Residential 141,200 141,200 141,200 141,200 141,200 141,200 141,200 141,200 141,200 141,200 141,200 141,200 141,200 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ 240,754 240,754 240,754 240,754 240,754 240,754 240,754 240,754 240,754 240,754 240,754 240,754 240,754 Revenue
Residential $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $209,063 $2,508,761 Non-Residential 296,520 296,520 296,520 296,520 296,520 296,520 296,520 296,520 296,520 296,520 296,520 296,520 3,558,240 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ --------------- $505,583 $505,583 $505,583 $505,583 $505,583 $505,583 $505,583 $505,583 $505,583 $505,583 $505,583 $505,583 $6,067,001 FY 2025 Year End Projection $6,025,345
Difference $41,656
Percent 0.7%
FY 2026 Budget $6,082,390
Difference ($15,389)
Percent -0.3%
Notes
ATTACHMENT A
City of Stockton
Stormwater Rate Study
Cost of Service Summary
Exhibit 6
Total
Revenues at Present Rates $6,127,822
Distributed Revenue Requirement $11,226,171
--------------
Balance/(Deficiency) of Funds ($5,098,348)
ATTACHMENT A
City of Stockton
Stormwater Rate Study
Average Unit Costs
Exhibit 7
Total
Total Costs - $ / ERU / Month $3.85
Current Rates $ / Month $2.10
Base Data:
Total Billed ERUs 243,168
ATTACHMENT A
City of Stockton
Stormwater Rate Study
Rate Summary
Exhibit 8
Present
Rates FY 2027 FY 2028 FY 2029 FY 2030 FY 2031
Monthly Rate (per ERU) $2.10 $3.85 $5.60 $6.85 $7.85 $8.10 Proposed
ATTACHMENT A
Technical Appendix B –Proposition 218 Notice
ATTACHMENT A
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/27 /28 /29 /26 /27 /30 /28 /31 /24 /32 /27 /33 /34 /25 /26 /27 /35/36/35/31 /26 /37 /25 /38 /39 /40 /41 /i255 /43 /44 /45 /46 /47 /48 /i255 /49 /45 /50 /51 /52 /53 /54/45 /41 /51 /i255 /49 /46 /48 /45 /41 /52 /i255 /44 /48 /i255 /54 /45 /i255 /54 /i255 /55 /51 /41 /54 /56 /44 /57 /58 /i255 /59 /50 /44 /57 /45 /60 /61 /62 /i255 /64 /65 /66 /67 /i255 /68 /69 /i255 /70 /66 /68 /71 /72 /66 /68 /73 /74 /75 /i255 /75 /66 /68 /76/77/78/79/66 /62 /76 /i255 /75 /67 /75 /66 /62/77/80/i255/78/61/65 /71 /61 /i255 /81 /76 /68 /66 /62 /71 /66 /75 /i255 /67 /68 /82 /76 /i255 /81 /76 /68 /81 /62 /76 /66 /67 /80 /i255 /65 /75 /i255 /79 /66 /i255 /79 /i255 /83 /76 /62 /79 /72 /65 /73 /84 /i255 /81 /68 /65 /73 /66 /85 /i255 /86 /62 /87 /62 /73 /82 /62 /75 /i255 /69 /76 /68/77/i255 /75 /66 /68 /76/77/78/79/66/62
/76 /i255 /76 /79 /66 /62 /75 /i255 /81 /79 /65 /88 /i255 /83 /67 /i255 /81 /76 /68 /81 /62 /76 /66 /67 /i255 /68/78/73/62 /76 /75 /i255 /68 /76 /i255 /71 /82 /75 /66 /68/77/62/76 /75 /i255 /i255 /68 /69 /i255 /76 /62 /71 /68 /76 /88 /i255 /88 /68 /i255 /73 /68 /66 /i255 /71 /68 /87 /62 /76 /i255 /66 /61 /62 /i255 /66 /68 /66 /79 /89 /i255 /71 /68 /75 /66 /i255 /68 /69 /i255/77/79/65 /73 /66 /62 /73 /79 /73 /71 /62 /80 /i255 /76 /62 /81 /79 /65 /76 /75 /i255 /79 /73 /88 /i255 /73 /62 /62 /88 /62 /88 /i255 /65/77/81/76 /68 /87 /62/77/62/73 /66 /75 /85 /i255 /60 /61 /79 /66 /74 /75 /i255 /83 /62 /71 /79 /82 /75 /62 /i255 /71 /82 /76 /76 /62 /73 /66 /i255 /75 /66 /68 /76/77/78/79/66 /62
/76 /i255 /76 /79 /66 /62 /75 /i255/78/62/76 /62 /i255 /79 /88 /68 /81 /66 /62 /88 /i255 /65 /73 /i255 /90 /91 /91 /92 /i255 /93 /94 /95 /i255 /67 /62 /79 /76 /75 /i255 /79 /84 /68 /96 /i255 /79 /73 /88 /i255 /61 /79 /87 /62 /i255 /73 /62 /87 /62 /76 /i255 /83 /62 /62 /73 /i255 /65 /73 /71 /76 /62 /79 /75 /62 /88 /85 /i255 /86 /62 /75 /62 /76 /87 /62 /i255 /69 /82 /73 /88 /75 /80 /i255/78/61/65 /71 /61 /i255 /61 /79 /87 /62 /i255 /i255 /83 /62 /62 /73 /i255 /82 /75 /62 /88 /i255 /66 /68 /i255 /71 /68 /87 /62 /76 /i255 /69 /82 /73 /88 /65 /73 /84 /i255 /75 /61 /68 /76 /66 /69 /79 /89 /89 /75 /80 /i255 /79 /76 /62 /i255 /73 /62 /79 /76 /89 /67 /i255 /88 /62 /81 /89 /62 /66 /62 /88 /85 /i255 /97 /98 /99 /100 /101 /102 /i255 /101 /98 /104 /105 /i255 /106 /107 /98 /105/108/109/100/107 /110 /105 /i255 /104 /107 /111 /112 /111 /107 /101 /i255 /113 /110 /110 /99 /106 /i255 /100 /99 /99 /111 /107 /111 /98 /113 /100 /112 /i255 /105 /110 /114 /110 /113 /104 /110 /106 /i255 /107 /98 /i255 /100 /114 /98 /111 /99 /i255 /106 /110 /105 /114 /111 /115 /110 /i255 /112 /110 /114 /110 /112 /i255 /115 /104 /107 /106 /102 /i255 /106 /101 /106 /107 /110/108/i255/116 /100 /111 /112 /104 /105 /110 /106 /i255 /100 /113 /99 /i255 /111 /113 /115 /105 /110 /100 /106 /110 /99 /i255 /105 /111 /106 /117 /106 /i255 /107 /98 /i255 /101 /98 /104 /105 /i255 /118 /105 /98 /118 /110 /105 /107 /101 /102 /i255 /112 /111 /117 /110 /i255 /119 /98 /98 /99 /111 /113 /120 /121 /i255 /60 /61 /62 /i255 /64 /65 /66 /67 /i255 /65 /75 /i255 /81 /76 /68 /81 /68 /75 /65 /73 /84 /i255 /79 /i255 /84 /76 /79 /88 /82 /79 /89 /80 /i255 /122 /87 /62 /123 /67 /62 /79 /76 /i255 /76 /79 /66 /62 /i255 /79 /88 /124 /82 /75 /66/77/62/73 /66 /i255 /75 /66 /79 /76 /66 /65 /73 /84 /i255 /65 /73 /i255 /122 /75 /71 /79 /89 /i255 /67 /62 /79 /76 /i255 /92 /125 /92 /126 /i255 /93/127/82/84 /82 /75 /66 /i255 /90 /80 /i255 /92 /125 /92 /128 /96 /85 /i255 /129 /69 /i255 /79 /81 /81 /76 /68 /87 /62 /88 /80 /i255 /66 /61 /62 /i255 /64 /65 /66 /67 /i255/78/65/89 /89 /i255 /65 /73 /87 /62 /75 /66 /i255 /76 /62 /87 /62 /73 /82 /62 /75 /i255 /65 /73 /i255 /89 /68 /73 /84 /i255 /68 /87 /62 /76 /88 /82 /62 /i255 /75 /66 /68 /76/77/78/79/66 /62 /76 /i255 /75 /67 /75 /66 /62/77/i255 /77/79/65 /73 /66 /62 /73 /79 /73 /71 /62 /i255 /79 /73 /88 /i255 /65/77/81/76 /68 /87 /62/77/62/73 /66 /75 /85 /i255 /130 /87 /62 /73 /i255 /79 /69 /66 /62 /76 /i255 /67 /62 /79 /76 /i255 /122 /87 /62 /80 /i255 /67 /68 /82 /76 /i255 /75 /66 /68 /76/77/78/79/66 /62 /76 /i255 /76 /79 /66 /62 /i255/78/65/89 /89 /i255 /75 /66 /65 /89 /89 /i255 /83 /62 /i255 /89 /68/78/62/76 /i255 /66 /61 /79 /73 /i255 /68 /66 /61 /62 /76 /i255 /71 /65 /66 /65 /62 /75 /i255 /65 /73 /i255 /66 /61 /62 /i255 /76 /62 /84 /65 /68 /73 /85 /64 /65 /66 /67 /i255 /68 /69 /i255 /70 /66 /68 /71 /72 /66 /68 /73 /i255 /131/82/73 /65 /71 /65 /81 /79 /89 /i255/132/66/65 /89 /65 /66 /65 /62 /75 /i255/133/62/81 /79 /76 /66/77/62/73 /66 /i255 /92 /134 /125 /125 /i255/135/79/87 /67 /i255/133/76/65 /87 /62 /i255 /70 /66 /68 /71 /72 /66 /68 /73 /80 /i255/64/127/i255/91 /134 /92 /125 /92 /43 /44 /45 /46 /i255 /50 /136 /i255 /49 /45 /50 /137 /56 /45 /50 /57 /i255 /59/51 /50 /138 /50/48 /41 /139 /i255 /140 /139 /141 /142 /48 /45 /52 /41 /57 /45 /48 /i255 /45/50 /i255 /49 /45 /50/51 /52 /53 /54 /45 /41 /51 /i255 /143 /45 /44 /144 /44 /45 /46 /i255 /145 /54 /45 /41 /48 /86 /62 /87 /65 /62/78/i255/66 /61 /65 /75 /i255 /81 /82 /83 /89 /65 /71 /i255 /61 /62 /79 /76 /65 /73 /84 /i255 /73 /68 /66 /65 /71 /62 /80 /i255 /79 /87 /79 /65 /89 /79 /83 /89 /62 /i255 /65 /73 /i255/77/82/89 /66 /65 /81 /89 /62 /i255 /89 /79 /73 /84 /82 /79 /84 /62 /75 /80 /i255 /83 /67 /i255 /75 /71 /79 /73 /73 /65 /73 /84 /i255 /66 /61 /62 /i255/146/86/i255 /71 /68 /88 /62 /i255 /68 /76 /i255 /87 /65 /75 /65 /66 /65 /73 /84 /i255/109/109/109/121/106 /107 /98 /115 /117 /107 /98 /113 /115 /100 /121 /120 /98 /114 /147 /106 /107 /98 /105/108/105/100 /107 /110 /106 /85
ATTACHMENT A
/0 /1 /2 /3 /2 /4 /5 /6 /i255 /8 /9 /10 /5 /i255 /11 /6 /12 /13 /4 /10 /14 /5 /15 /10 /4 /i255 /8 /5 /16 /13 /17 /1 /5 /6 /i255 /18 /2 /1 /i255 /19 /9 /18 /5 /20 /i255 /8 /5 /21 /17 /9 /22 /21 /5 /i255 /19 /10 /2 /1 /14 /23 /9 /10 /5 /1 /i255 /19 /24 /4 /10 /5 /14 /25 /26/27/27/28/29 /30 /i255 /32 /33 /i255 /34 /29 /32 /35 /32 /36 /37 /38 /i255/39/28/40 /41/27/26/27/i255/25 /42 /32 /29/27/43/28/42 /37 /29 /i255 /44 /28 /42 /37 /36 /45 /26 /36 /42 /32/27/37/29 /i255
/45 /46 /28 /36 /36 /37 /36
/25 /42 /28 /29 /42 /i255/47/28/42 /37
/48/26/49 /26 /36 /42 /i255 /50 /51 /i255
/52 /53 /52 /54
/55 /26 /46 /30 /i255 /50 /51 /i255
/52 /53 /52 /56
/55 /26 /46 /30 /i255 /50 /51 /i255
/52 /53 /52 /57
/55 /26 /46 /30 /i255 /50 /51 /i255
/52 /53 /52 /58
/55 /26 /46 /30 /i255 /50 /51 /i255
/52 /53 /59 /53
/44 /28 /42 /37 /36 /i255 /34 /37 /29 /i255/39/32/60 /42 /61 /25 /41 /60 /49 /46 /37 /i255 /62 /28/27/41/46 /30 /i255 /44 /37 /36 /41 /38 /37 /60 /42 /41 /28 /46 /i255
/64 /65 /66 /67 /68 /69 /70 /71
/64 /72 /73 /74/75/64 /75 /73 /76/77/64/76 /73 /74/75/64/78 /73 /74/75/64/74 /73 /79 /77 /39/26/46 /42 /41 /80 /62 /28/27/41/46 /30 /i255
/64 /65 /81 /82 /83 /82 /84 /85 /i255/86/84/82 /87 /88/64 /72 /73 /74/75/64 /75 /73 /76/77/64/76 /73 /74/75/64/78 /73 /74/75/64/74 /73 /79 /77 /89/32/60 /80
/44 /37 /36 /41 /38 /37 /60 /42 /41 /28 /46 /88 /88
/45 /32/27/27/37/29 /90 /41 /28 /46 /i255
/91 /77/92/i255/93 /70 /84 /94 /82 /87 /95 /i255
/96 /67 /69 /87 /97 /68
/98 /60 /38 /26 /36 /42 /29 /41 /28 /46 /i255
/78 /91/92/i255/93 /70 /84 /94 /82 /87 /95 /i255
/96 /67 /69 /87 /97 /68
/98 /60 /36 /42 /41 /42 /26 /42 /41 /32 /60 /28 /46 /i255 /76 /99/92/i255/93 /70 /84 /94 /82 /87 /95 /i255
/96 /67 /69 /87 /97 /68
/64 /72 /73 /74/75/64 /75 /73 /76/77/64/76 /73 /74/75/64/78 /73 /74/75/64/74 /73 /79 /77 /100/i255/102 /103 /104 /105 /106 /107 /108 /109 /i255 /110 /105 /105 /i255 /111 /108 /109 /112 /107 /108 /103 /113 /112 /110 /105 /i255 /110 /104 /104 /114 /106 /103 /113 /109 /i255 /114 /113 /115 /108 /111 /i255 /113 /115 /110 /103 /i255 /109 /112 /103 /116 /105 /108 /117 /118 /110/119/112/105 /120 /121 /112 /122 /108 /122 /123 /i255 /107 /106 /124 /105 /108 /125 /123 /i255 /118 /114 /106 /111 /124 /105 /108 /125 /123 /i255 /110 /124 /110 /111 /113/119/108/103 /113 /i255 /115 /114/119/108/109 /123 /i255 /108 /113 /104 /122 /126 /100 /100 /i255 /i255/127/114/103 /117 /111 /108 /109 /112 /107 /108 /103 /113 /112 /110 /105 /i255 /110 /104 /104 /114 /106 /103 /113 /109 /i255 /110 /111 /108 /i255 /128 /112 /105 /105 /108 /107 /i255 /128 /110 /109 /108 /107 /i255 /114 /103 /i255 /113 /114 /113 /110 /105 /i255 /110 /104 /111 /108 /110 /116 /108 /i255 /119/106/105 /113 /112 /124 /105 /112 /108 /107 /i255 /128 /120 /i255 /110 /i255 /107 /108 /103 /109 /112 /113 /120 /i255 /118 /110 /104 /113 /114 /111 /i255 /110 /103 /107 /i255 /113 /115 /108 /103 /i255 /107 /112 /129 /112 /107 /108 /107 /i255 /128 /120 /i255 /113 /115 /108 /i255 /i255 /130/131/132/i255/108/133
/106 /112 /129 /110 /105 /108 /103 /113 /i255 /113 /114 /i255 /107 /108 /113 /108 /111/119/112/103 /108 /i255 /113 /115 /108 /i255 /103 /106/119/128/108 /111 /i255 /114 /118 /i255 /128 /112 /105 /105 /108 /107 /i255 /130/131/132/109 /134 /135 /70 /i255 /136 /82 /87 /95 /i255 /97 /137 /70 /68 /67 /87 /70 /94 /i255 /67 /84 /93 /i255/138/67/82 /84 /87 /67 /82 /84 /94 /i255 /67 /i255 /71 /67 /68 /85 /70 /i255 /84 /70 /87/139/97/68 /140 /i255 /97 /96 /i255 /94 /87 /97 /68/138/i255 /93 /68 /67 /82 /84 /94 /141 /i255 /137 /82 /137 /70 /94 /141 /i255 /137 /142/138/137/i255 /94 /87 /67 /87 /82 /97 /84 /94 /i255 /67 /84 /93 /i255 /94 /87 /97 /68/138/139/67/87/70 /68 /i255 /135 /97 /71 /93 /82 /84 /85 /i255 /137 /97 /84 /93 /94 /i255 /87 /97 /i255 /69 /97 /71 /71 /70 /69 /87 /i255 /67 /84 /93 /i255/138/97/83 /70 /i255 /94 /87 /97 /68/138/139/67/87 /70 /68 /i255 /96 /68 /97/138/i255/137 /68 /97 /137 /70 /68 /87 /82 /70 /94 /i255 /67 /84 /93 /i255 /82 /84 /87 /97 /i255 /71 /97 /69 /67 /71 /i255/139/67/87 /70 /68/139/67/95 /94 /73 /i255 /143 /87 /97 /68/138/139/67/87 /70 /68 /i255 /82 /84 /69 /71 /142 /93 /70 /94 /i255 /67 /84 /95 /i255/139/67/87 /70 /68 /i255 /87 /135 /67 /87 /i255 /144 /97/139/94/i255 /97 /145 /i255 /137 /68 /97 /137 /70 /68 /87 /95/146/68/67 /82 /84/139/67/87 /70 /68 /141 /i255/139/67/87 /70 /68 /i255 /96 /68 /97/138/i255/94 /137 /68 /82 /84 /140 /71 /70 /68 /94 /141 /i255/139/67/87 /70 /68 /i255 /96 /68 /97/138/i255 /135 /97 /94 /70 /94 /141 /i255 /70 /87 /69 /73/146/67/71 /97 /84 /85 /i255/139/82/87 /135 /i255/139/67/87 /70 /68 /i255 /142 /94 /70 /93 /i255 /96 /97 /68 /i255 /69 /97/138/138/70/68 /69 /82 /67 /71 /65 /82 /84 /93 /142 /94 /87 /68 /82 /67 /71 /i255 /137 /142 /68 /137 /97 /94 /70 /94 /73
/134 /135 /70 /i255 /94 /87 /97 /68/138/139/67/87 /70
/68 /i255 /94 /95 /94 /87 /70/138/i255/137 /68 /97 /87 /70 /69 /87 /94 /i255 /95 /97 /142 /68 /i255 /137 /68 /97 /137 /70 /68 /87 /95 /i255 /147 /95 /148 /i255 /149/66 /68 /70 /83 /70 /84 /87 /82 /84 /85 /i255 /144 /97 /97 /93 /i255 /93 /67/138/67/85 /70 /i255 /87 /135 /68 /97 /142 /85 /135 /i255 /69 /97 /71 /71 /70 /69 /87 /82 /97 /84 /i255 /67 /84 /93 /i255 /68 /70/138/97/83 /67 /71 /97 /96 /i255 /94 /87 /97 /68/138/139/67/87/70
/68
/149/150 /70 /70 /137 /82 /84 /85 /i255 /137 /97 /71 /71 /142 /87 /67 /84 /87 /94 /i255 /71 /82 /140 /70 /i255 /87 /68 /67 /94 /135 /141 /i255 /97 /82 /71 /141 /i255 /69 /135 /70/138/82/69 /67 /71 /94 /141 /i255 /94 /70 /93 /82/138/70/84 /87 /67 /84 /93 /i255 /94 /70/139/67/85 /70 /i255 /96 /68 /97/138/i255/70 /84 /87 /70 /68 /82 /84 /85 /i255 /71 /97 /69 /67 /71 /i255 /68 /82 /83 /70 /68 /94 /141 /i255 /69 /68 /70 /70 /140 /94 /141 /i255 /94 /71 /97 /142 /85 /135 /94 /67 /84 /93 /i255 /87 /135 /70 /i255/151/70/71 /87 /67
/134 /135 /70 /i255 /94 /95 /94 /87 /70/138/i255/82 /94 /i255 /67 /85 /82 /84 /85 /i255 /67 /84 /93 /i255 /96 /67 /69 /70 /94 /i255 /69 /68 /82 /87 /82 /69 /67 /71 /i255 /69 /135 /67 /71 /71 /70 /84 /85 /70 /94 /148 /i255 /149/136 /142 /68 /68 /70 /84 /87 /i255 /94 /87 /97 /68/138/139/67/87/70 /68 /i255 /68 /67 /87 /70/146/64/99 /73 /79 /77 /i255 /137 /70 /68 /i255/138/97/84 /87 /135 /i255 /96 /97 /68 /i255 /70 /67 /69 /135 /152 /153 /142 /82 /83 /67 /71 /70 /84 /87 /i255/151/139/70/71/71 /82 /84 /85 /i255/86/84/82 /87 /i255 /154 /152/151/86/155/141 /i255 /67 /147 /97 /142 /87 /i255 /64 /99 /75 /i255 /137 /70 /68 /i255 /95 /70 /67 /68 /96 /97 /68 /i255 /67 /i255 /87 /95 /137 /82 /69 /67 /71 /i255 /94 /82 /84 /85 /71 /70 /156 /96 /67/138/82/71 /95 /i255 /135 /97/138/70/146/139/67/94 /i255 /94 /70 /87 /i255 /82 /84 /i255 /79 /91 /91 /99 /67 /84 /93 /i255 /135 /67 /94 /i255 /84 /70 /83 /70 /68 /i255 /147 /70 /70 /84 /i255 /82 /84 /69 /68 /70 /67 /94 /70 /93 /149/152 /157 /82 /94 /87 /82 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ATTACHMENT A
Resolution No.
STOCKTON CITY COUNCIL
RESOLUTION APPROVING THE 2025 STORMWATER RATE STUDY REPORT,
DETERMINING THAT NO MAJORITY PROTEST EXISTS TO THE PROPOSED
STORMWATER FEE RATE INCREASE, DIRECTING THE CITY MANAGER TO MAIL BALLOTS AND AUTHORIZING A PROPOSITION 218 PUBLIC HEARING TO
CONSIDER PROPOSED STORMWATER RATE ADJUSTMENTS
The Stormwater Utility was first established in 1991 in resp onse to the Porter Cologne Clean Water Act (CWA). The CWA governs water quality regulation in California and was established to protect the beneficial uses of water and water quality including surface water bodies, groundwater, and wetlands; and
The requirements of the Stormwater Utility have expanded extensively since the approval of the stormwater fee, which was intended to fund the first annual budget of the Stormwater operations in FY 1991-92. The rate for the stormwater fee set 34 years ago is insufficient to fund the maintenance necessary to sustain an aging system and meet State and Federal regulatory requirements; and
Following the completion of the Stormwater Master Plan, o n August 22, 2023, by Resolution 2023-08-22-1214, the City Council approved a professional services contract with HDR Engineering, Inc., to evaluate the Stormwater Utility’s revenue requirements, prepare a cost-of-service analysis, and design rates that proportionately allocate the costs of providing stormwater service among all customer classes and customers within each class; and
The Stormwater Rate Study Report used three interrelated analyses to address the adequacy and equity of the utility's rates : the revenue requirement analysis, which compares the revenues to the expenses of the utility to determine the overall rate adjustments required; the cost -of-service analysis, which allocates the revenue requirement to the various customer classes of service in a fair and equitable manner; and the rate design analysis, which considers both the level and structure of the rate design to collect the target level of revenue; and
On January 27, 2026, by Resolution 2026-01-27-1601, the City Council authorized the mailing of a Notice of Public Hearing (Notice) to be held no less than 45 days from the mailing of the Notice at 5:30 p.m. in the City Hall, to take testimony and consider written protests to the proposed stormwater rate adjustments; and
The Notices were mailed on February 11, 2026, to 84,871 record owners of any parcels upon which the stormwater service charges are proposed for, and any customers who are directly responsible for the payment of stormwater service charges; and
Notice of the time and place of the Public Hearing was published in The Record on February 13, 2026, and March 19, 2026; and
The Draft 2025 Stormwater Rate Study Report containing the proposed rates is available at www.stocktonca.gov/StormRates and hard copies are on file with the City Clerk; and
The City Council held the Public Hearing on March 31, 2026, not less than forty - five days after the Notice was mailed, and at the Public Hearing the City Council heard all oral testimony, and considered all written materials and written protests concerning the adoption of the proposed stormwater rate adjustments; and
At the close of the Public Hearing, the City had not received written protests opposing the proposed stormwater rate adjustments from a majority of affected property owners, nor from a majority of affected stormwater utility customers who are not property owners but are directly liable for the payment of the stormwater service charges; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF STOCKTON, AS FOLLOWS:
1. The City Council, after holding a public hearing, determines that no majority protest has been filed by the property owners and customers of record subject to the proposed Stormwater Fees.
2. The City Council hereby adopts the Final Stormwater Rate Study Report (Attachment A) prepared by HDR Engineering, Inc.
3. The City Manager is directed to mail ballots to all property owners or customers of record subject to the proposed rates and charges, and to schedule a public hearing as required by Proposition 218 on June 9, 2026, as the deadline for submission of ballots and the end of the voting period.
4. The City Manager is hereby authorized to take whatever actions are necessary and appropriate to carry out the purpose and intent of this Resolution.
PASSED, APPROVED, and ADOPTED March 31, 2026 .
CHRISTINA FUGAZI
Mayor of the City of Stockton
ATTEST:
KATHERINE ROLAND, CMC, CPMC
City Clerk of the City of Stockton
City of Stockton
Legislation Text
File #: 26-0278, Version: 1
ADOPT A RESOLUTION DE-OBLIGATING PREVIOUSLY ALLOCATED AFFORDABLE HOUSING
FUNDING AND APPROVING AFFORDABLE HOUSING LOAN AWARDS TO ELIGIBLE RESPONDENTS TO THE 2025 AFFORDABLE HOUSING NOTICE OF FUNDING AVAILABILITY (NOFA)
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Approve the de-obligation of $1,614,000 of Home Investment Partnerships Program (HOME) and Low-and Moderate-income Housing Fund (LMIHF), funding from the Sierra Vista, Phase III project, (Delta Community Developers Corporation (DCDC), developer);
2. Approve loans to the following three affordable housing developments in the amounts specified, provided that, as a condition of funding, the borrower demonstrates to the City Manager’s or designee’s satisfaction that each project meets the underwriting and general requirements of the 2025 Affordable Housing Notice of Funding Availability (NOFA) guidelines:
a. $5,000,000 to Visionary Home Builders for the development of either The View at Channel (132 units) or The Don Shalvey Apartment (108 units) projects, dependent on which project achieves full funding to construct first; b. $2,800,000 to Mutual Housing for the development of the Fairview Terrace (76 units) project;
c. $4,179,838 to DCDC for the development of the Danny Drive (66 units) project; Funding sources for the loans can include the use of any combination of HOME, HOME American Rescue Plan (HOME-ARP), LMIHF, Permanent Local Housing Allocation (PLHA), Neighborhood Stabilization Program (NSP), Community Development Block Grant (CDBG), and/or Homeless Housing Assistance and Prevention (HHAP), based on eligibility and timeliness of the funding source(s) at the time of full project funding commitments and construction schedule;
3. Approve the allocation of: up to 132-units of affordable housing units to Visionary Home Builders for The View at Channel or the Don Shalvey Apartment projects; up to 76 units to Mutual Housing for the Fairview Terrace project; and up to 66 units to DCDC for the Danny Drive project pursuant to Article XXXIV of the California Constitution.
4. Authorize the City Manager, or designee, to de-obligate and reallocate funding allocations awarded under this resolution if any project is unable to meet the underwriting and general City of Stockton Printed on 3/26/2026Page 1 of 6
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requirements of the 2025 NOFA, including but not limited to ability to meet: securing of full funding stack deadlines; construction start deadlines; and/or inability to meet any other City requirements, including underwriting program guidelines. If defunded, the City Manager is authorized to reallocate the funding to eligible projects that have competed in a City of Stockton Housing NOFA that can meet the funding source agency timeliness and general City affordable housing program guidelines.
5. Authorize the City Manager, or designee, to take actions that are necessary and appropriate to carry out the purpose and intent of this resolution, including the execution of loan documents, subordination agreements, and the reallocation of funding sources.
Summary
De-obligation Recommendation Summary
Prior to making recommendations for the new affordable housing loan awards (2025 Housing and Urban Development (HUD) entitlement funds), staff reviewed past funding allocations to ensure all funding was moving toward the construction of tangible affordable housing units by applicable funding expenditure deadlines. First, staff reviewed all past housing allocations that were at least three years old for improvement in funding and construction readiness. Second, staff examined whether the 3+ year old allocation projects could, or were likely to, move to construction within the next three years.
The Sierra Vista III project was identified as 1) having been allocated funding more than three years ago; 2) unlikely to commence construction in the next three years; and 3) the source of funding was on a “use it or lose it” basis. With the average construction completion timeline being 15 to 24 months, the identified project cannot meet construction completion and funding expenditure timelines, as confirmed by the developer. Based on this analysis, staff recommends that the following project and funding allocation be considered for de-obligation and the funding be added to available funds for the best projects as scored through the 2025 Affordable Housing NOFA. The project and funds recommended for de-obligation is as follows:
· $1,614,000 of HOME and LMIHF funding from the Sierra Vista, Phase III project, with Delta Community Developers Corporation (DCDC) as developer. Allocated by Resolution Numbers 2019-04-02-1119 (Attachment A) and 2020-01-28-1401 (Attachment B).
Funding Allocation Summary
On October 30, 2025, the City issued a Notice of Funding Availability (NOFA) making available funding from local, state, and/or federal sources to be awarded to qualified housing developers for eligible affordable rental housing project proposals.
The Housing NOFA application period closed on December 18, 2025 with a total of 8 project proposals received for a combined total request of $28.2 million.
The City’s Economic Development Department (EDD) scrutinized all proposals, first by confirming that all requirements of the application were submitted and then by reviewing content in detail and scoring each criteria category as required by the Council-approved NOFA process (Attachment C - Motion No. 2025-11-04-1601).
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Based on the scores, the following housing projects are recommended for allocation:
a. The View at Channel (132 units) or The Don Shalvey Apartment (108 units) Award recommendation: $5,000,000 to Visionary Home Builders for the development of either project, dependent on which project achieves full funding to construct first; b. Fairview Terrace (75 units) Award Recommendation: $2,800,000 to Mutual Housing for the development of the project. (Note: the current award has been requested as gap funding for the project, which already received funding through a past affordable housing NOFA process totaling $7,037,865 (Attachment D - Resolution No. 2024-11-19- 1505);
c. Danny Drive (65 units) Award Recommendation: $4,179,838 to DCDC for the development of the project. (Note: the current award has been requested as additional project support towards a stronger application for the much-needed tax credit funding award. Previous City funding allocation is $1,300,000 (Attachment E - Resolution No. 2024-01-09-1501). This funding has been contracted and utilized (expended) for site acquisition.
The proposed projects are consistent with the City’s affordable housing goals and priorities identified in its Five-Year Consolidated Plan.
DISCUSSION
Background
On October 30, 2025, the Economic Development Department (EDD) released a Notice of Funding Availability (2025 Housing NOFA) to interested parties of the availability of funds for the development or preservation of affordable housing units in Stockton. The 2025 Housing NOFA information was sent to more than 300 community stakeholder contacts (including housing developers), shared via multiple social media platforms, posted on the City’s official website, and EDD issued a public media press release. The 2025 Housing NOFA made funds available to provide financing for property acquisition, housing construction, and property rehabilitation/conversion with the end goal of producing multi-family affordable rental housing projects.
In 2025, the Economic Development Department established rental housing program guidelines, as required by the City’s funding agencies (e.g., US Department of Housing and Urban Development (HUD) and the California Department of Housing and Community Development (HCD)) to ensure that the City’s HUD and HCD funds are invested prudently, efficiently, and in compliance with applicable state and federal requirements (Attachment F - Federal Checklist of Home Rental Housing Requirements). The core purpose of these guidelines was to provide a standardized framework for evaluating and approving HUD/HCD-assisted rental projects before funds are awarded to projects.
The 2025 Housing NOFA established project selection criteria (Attachment G) that would score project proposals based on the following:
· Developer Experience and Financial Capacity - up to 30 Points · Strength of Proforma - up to 30 points
· Populations Served - up to 15 points
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· Unique Project Design Features - up to 15 points
· Demonstrated Leverage of Other Sources - Up to 10 points The 2025 Housing NOFA resulted in the submittal of eight (8) applications from developers, requesting approximately $28.2 million of City affordable housing funds.
EDD staff and TDA Consulting Inc. reviewed all proformas from the applications and conducted preliminary underwriting analysis of all project proposals received. The City of Stockton is held to stringent regulations by its state and federal funding agencies and as such, the City must conduct a risk assessment of each applicant and its proposal to ensure the selected applicant has the ability to comply with funding requirements. With this consideration and in conformance with the NOFA project evaluation criteria, EDD’s project recommendations are being made after considering several project proposal factors, including but not limited to:
· Available funding sources and respective allowable uses (Attachment H) · Responsiveness to project details as outlined in the NOFA · Overall project characteristics
· Number of units to be developed
· Assessment of developer & team capacity and experience including the ability to comply with stringent state and federal regulatory requirements
· Demonstrable experience developing and managing projects of a similar type and scope · Project proforma consistency with metrics and proforma requirements outlined in the City’s Program Guidelines
· Project funding leverage (amount of non-City funding to be contributed) After the ratings were compiled, averaging each of the three rater’s scores, the City enlisted the services of artificial intelligence (AI) programming to run a full analysis of the submitted applications and supporting documents as an additional measure to be factored along with the three human raters. While the AI-generated scores varied slightly, when factored as a fourth rater and averaged with the three human ratings, the ranking of the projects did not change. A full listing of all projects and their ratings is available as Attachment I.
Present Situation
De-obligation of Funding
Due to funding timeliness constraints, staff reviewed all previously allocated housing funding that has not yet gone to contract to ensure that reasonable paths to actual construction within the next three years remain viable. Staff identified one project that had allocations at least three years old that is highly unlikely to advance to construction within the next three years. After reviewing the findings with the City Manager, it was determined that it was in the City’s best interest to recommend to Council that the funding allocation be de-obligated. De-obligating funding of the following project that is stagnant in progression and/or dead will allow the funding to be re-allocated to projects submitted through the NOFA process that appear more viable to advance to construction in the next three years. The project and funding amount recommended for de-obligation is as follows:
Project
Developer Amount
Sierra Vista III DCDC(Housing Auth. Of SJC) $1,614,000
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Should Council approve the de-obligation recommendation, the total amount of $1,614,000 can be added to the new, 2025 entitlement HOME funding and other available housing sources, totaling $10,365,838; for a total available award amount of $11,979,838. This amount will cover the three recommended new affordable housing projects from the 2025 NOFA process.
However, if Council were to amend the recommended de-obligation in any way, commensurate adjustment must also be made to the recommended allocations, as the awarding amount of $11,979,838 is only available with approval of the recommended de-obligation.
Affordable Housing Awards
After careful review and analysis of each proposal, EDD recommends funding awards to the following projects:
The View at Channel and/or Don Shalvey Apartments
Applicant: Visionary Home Builders
Co-Applicant: N/A
Project Address: 31 E Channel Street
Funding Request: $ 5,000,000
Funding Recommendation: $ 5,000,000
Estimated Total Development Cost: $ 95,684,068 / $83,978,508 Estimated Number of Housing Units: 132 / 108
Estimated Cost Per Unit: $ 714,060 / 763,441
Council District: 5
Previous Award (if any): $0
Target Population Served: Families
Target AMI Level: 30% to 80% of the Area Median Income
Affordability Restrictions: Affordability covenants will be imposed on the property per funding source(s) requirements.
Fairview Terrace
Applicant: Mutual Housing California
Co-Applicant: N/A
Project Address: 2222 S Airport Way
Funding Request: $2,800,000 (Final gap funding)
Funding Recommendation: $ 2,800,000
Total Development Cost: $ 40,226,856
Estimated Number of Housing Units: 76
Estimated Cost Per Unit: $ 529,301
Council District: 6
Previous Award (if any): $ 7,037,865
Target Population Served: Senior Housing 55+
Target AMI Level: 30% to 60% of the Area Median Income
Danny Drive
Applicant: Delta Community Developers Corp. (DCDC)
Co-Applicant: N/A
Project Address: 6303 Danny Drive
Funding Request: $4,179,838
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Funding Recommendation: $ 4,179,838
Estimated Total Development Cost: $ 39,744,335
Estimated Number of Housing Units: 66
Estimated Cost Per Unit: $ 602,187
Council District: 2
Previous Award (if any): $ 1,300,000 (Used for site acquisition) Target Population Served: Senior Housing 62+
Target AMI Level: 30% to 60% of the Area Median Income
Based on staff review and the available funding sources, the projects being recommended are generally consistent with the City’s Five-Year Consolidated Plan, Homeless Strategic Plan, Housing Element, and the 2025 Housing NOFA criteria. Available at:
<https://www.stocktonca.gov/business/economic_development/housing_index.php> and
<https://www.stocktonca.gov/business/economic_development/homeless__initiatives.php> The applications received represent a proposed 523 affordable housing units. In compliance with HUD/HCD underwriting requirements, the City will require projects to secure all other sources of funding prior to entering into a written agreement with the City resulting in legal funding commitment and ability to expend.
Consistent with the rental housing program guidelines the City financing will have a 55-year loan term (and affordability period) with simple interest accruing at 3%. A Loan Agreement, Promissory Note, Deed of Trust, and Regulatory Agreement will be executed to secure the City’s investment and affordability of the units. Upon all of the financing being obtained for these projects, as is typical for these types of projects, the City’s loans may require subordination to the other funding sources. Even in a subordinate position, upon completion of the projects, there will be sufficient value to secure the City’s loans.
FINANCIAL SUMMARY
There is no financial impact to the City’s General Fund or any other unrestricted fund as result of this action. Funding for these projects can come from a variety of available sources: HOME, HOME-ARP, PLHA, NSP, LMIHF, CDBG, and/or HHAP. Funding for these affordable housing projects will remain flexible to accommodate variations in project readiness, and alignment with applicable grant expenditure deadlines, as well as compliance with specific use requirements associated with each funding source.
Attachment A - Resolution 2019-04-02-1119
Attachment B - Resolution 2020-01-28-1401
Attachment C - Motion 2025-11-04-1601
Attachment D - Resolution 2024-11-19-1505
Attachment E - Resolution 2024-01-09-1501
Attachment F - Checklist of Home Rental Housing Requirements Attachment G - Project Selection Criteria
Attachment H - Housing Source Funds Description 2026
Attachment I - Scoring Matrix
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ATTACHMENT A
ATTACHMENT A
ATTACHMENT A
ATTACHMENT B
ATTACHMENT B
EXHIBIT 1
2020 Affordable Housing Loan Program Allocation
Applicant Project
# of
Units
Est. Project
Cost
Funds
Requested
Proposed
Funding Source
DCDC Housing
First LLC
Partnership
in Housing
for the
Homeless
13 $4,820,646 $790,646 $684,303
$106,343
CHDO
CDBG
Housing Authority Sierra Vista
Apartments
Phase III
100 $46,062,862 $1,800,000 $364,000
$250,000
HOME
LMIHF
Service First of
Northern CA
The Hunter
House
120 $55,060,136 $1,800,000 $540,000 HOME
Mutual Housing
CA & APSARA
Park Village
Apartments
208 $39,410,527 $1,800,000 $396,000 HOME
DFA Medici
Associates LP
Medici Artist
Lofts
34 $16,490,572 $1,510,345
(request later
reduced to
$500,000)
$250,000 LMIHF
TOTAL
$7,700,991
$2,590,646
ATTACHMENT B
ATTACHMENT C
ATTACHMENT D
ATTACHMENT D
ATTACHMENT D
ATTACHMENT D
ATTACHMENT E
ATTACHMENT E
ATTACHMENT F
ATTACHMENT F
ATTACHMENT F
ATTACHMENT G
PROJECT EVALUATION & SCORING CRITERIA
INSTRUCTIONS FOR SCORING COMMITTEE MEMBERS:
This scoring criteria is designed to provide guidance to City staff in determining which proposal(s) should move forward in the development funding process. Regardless of numerical ranking, the scoring below does not operate to vest in an applicant or project any right to a reservation or commitment of funding. The City will, in all instances, commit gap funding consistent with sound and reasonable judgement, prudent business practices, and the exercise of its inherent discretion. For these reasons, applicants’ proposals should be reviewed and scored taking into account both the requirements outlined in the City’s Program Guidelines for Affordable Rental Housing and in relation to all other applications in a given NOFA cycle to determine, in the scoring committee’s opinion, which proposal(s) are strongest and provide the greatest public benefit.
A: DEVELOPER EXPERIENCE & FINANCIAL CAPACITY
(points will be based on the primary/lead
developer if co-developer is listed on app)
Max Points Criteria for Consideration
Applicant has demonstrable experience developing
and managing projects of a similar type and scope
(i.e., affordable multi-family rental housing),
leveraging other funding sources, and sound
audited financial statement(s) that comply with
Generally Accepted Accounting Principles (GAAP).
30 Organization, detail, and clarity of Project Narrative Bios/Resumes for project staff
Overall health/organization of Real Estate Owned (REO) Portfolio Audited financial statements that demonstrate sufficient net worth/liquidity
Current Letter of Intent (LOIs) for Debt/Equity with clear, market appropriate terms
Corporate profiles of project partners (e.g., accountant, Architectural & Engineering (A&E), legal, etc.)
Section Total Notes:
B: PROFORMA Max Points Criteria for Consideration
Applicant’s proforma will be evaluated against
underwriting metrics and proforma requirements
outlined in the City’s Program Guidelines for
Affordable Rental Housing (e.g., vacancy rate,
income/expense inflation, debt service coverage
ratio, etc.). The relative size/efficiency of the
Applicant’s gap funding request will also be
evaluated based on the total production of
affordable units at the lowest cost (including any
non-HOME units subject to Low Income Housing
Tax Credit (LIHTC) requirements).
30 Clear overall plan of finance presented City issued in UNLOCKED MS Excel format
Balanced Sources & Uses
Reasonable projections for income/expenses
Itemized development cost schedule (including Schedule of Values, General Contractor fees, etc.)
Projections of pre-conversion cash flow
Reasonable and transparent construction draw schedule Leverage ratios (e.g., Equity, Debt, “other” non-City gap funding) Proposed terms for City gap funding (i.e., loan term, interest rate, etc.) Modeled repayment period for City gap funding
Reasonableness of overall return to developer (i.e., developer fee, cash flow, Identity of Interest (IOI) fees to general contractor and/or property management)
Section Total Notes:
C: POPULATIONS SERVED Max Points Criteria for Consideration Applicant’s ability to provide a meaningful number
of units (i) with project based rental assistance; (ii) units income/rent restricted at 30% AMI; (iii) units
targeted to special needs populations; and/or (iv)
15 Project has commitment(s) for project-based rental assistance or has units income/rent restricted at 30% AMI; Project targets priority special needs populations
identified in the City’ Consolidated Plan (not including
ATTACHMENT G
large family units of 3+ bedrooms. Mixed-income
projects are also preferred, and in the case of
affordable housing preservation proposals, the City
may prioritize projects that maximize the retention
of existing project-based assistance.
merely senior projects) coordinated with appropriate
voluntary supportive services;
Provide large family units;
Meet other priorities within a mixed-income project;
Preserve existing project-based subsidies
Section Total Notes:
D: UNIQUE PROJECT DESIGN FEATURES AND
COMMUNITY OUTREACH
Max Points Criteria for Consideration
Review project specific location, design, and
amenity features that comply with or exceed
requirements outlined in the City’s Program
Guidelines for Affordable Rental Housing. Review
of project impact relative to any City initiatives or
priorities. Review any community outreach that has
been conducted to-date to solicit community
feedback and the integration of the feedback into
the project design.
15 Project is designed to meet/exceed a nationally recognized green building standard (e.g., Leadership in Energy and Environmental Design [LEED], Enterprise Green Communities, Energy Star, etc.) Project enhances or supports other city initiatives or priorities including but not limited to neighborhood revitalization, economic development, etc.
Project will provide community enhancement attributes (e.g., on-site early childhood education, or community health facilities, integrated public transit, etc.)
Community outreach conducted and integration of feedback into project design.
Section Total Notes:
E: DEMONSTRATED LEVERAGE OF OTHER
SOURCES
Max Points Criteria for Consideration
Review commitment of funds from sources other
than the City of Stockton. Review formal
commitment letters/documentation denoting
amount, source, and use of the funds. Leverage
funding reflected on project proforma sources.
10 Formal commitment letters/documentation.
Leverage funding clearly reflected on project proforma. Review Leverage ratio (defined as total development cost divided by the City’s total subsidy).
Section Total Notes:
TOTAL POINTS: /100
ADDITIONAL COMMENTS/CONCERNS:
ATTACHMENT H
Funding Source Descriptions
Funding resources made available each year by EDD may include local, state, and/or funding sources, a summary of which is provided here:
HOME Investment Partnerships Program (HOME): The City receives an annual allocation of HOME funds from HUD. These funds can only be used to provide financing for affordable housing development for households with incomes at or below 60% of AMI. All HOME funded projects must be completed within four (4) years of formal written agreement commitment.
HOME Community Housing Development Organization (CHDO) funds:
Fifteen percent of the City’s HOME allocations for housing development activities must be set -aside for qualified CHDOs that develop affordabl e housing in the community it serves. All HOME funded projects must be completed within four (4) years of the project commitment.
HOME-ARP funds: The City received an allocation of American Rescue Plan Act funds administered through the U.S. Department of Housing and Urban Development (HUD). These funds can only be used to provide affordable housing development financing for households who are homeless, at risk of homelessness, and other vulnerable populations. All HOME -ARP funded projects must be completed within four (4) years of the project commitment.
PLHA funds: The Permanent Local Housing Allocation (PLHA) Grant Program provides funding to local jurisdictions to expand the number of affordable housing units to meet the City's future Regional Housing Needs Allocation (RHNA).
LMIHF Fund: City of Stockton Successor Agency Low-Moderate Income Housing Fund (LMIHF) resources used for affordable housing activities including but not limited to property acquisition, new construction, and conversion/rehabilit ation for households with incomes up to 120% of the AMI.
PIP Program: State of California awarded Pro -Housing Incentives Pilot (PIP) Program funds to the City of Stockton in 2023 to be used for the Development of affordable housing. Funds can be used for property acquisition, new construction, conversion/rehabilitation, or capitalized reserves/operating subsidies for households with incomes up to 120% of the AMI.
HHAP Funds: Homeless Housing Assistance and Prevention (HHAP) funds are designed to support regionally coordinated efforts between the County, Continuum of Care (CoC), and the City to expand and develop local capacity to address immediate homelessness challenges. HHAP funds are focused on moving homeless individual s and families into permanent housing and ensuring those individuals and families maintain their permanent housing.
Project Name
Council
District Applicant Name Target Population
# of
Affordable
Units*
Total Project
Cost
Per Unit
Cost**
Amount
Requested Rater A Rater B Rater C
Average
Score AI Score
Average
with AI
Gap Beyond
Commitments
$'s
Construction
Start
90%
Occupancy
The View at Channel -
31 E Channel St 5 Visionary Home Builders Low/Mod Families 132 95,684,068$ 724,879 $ 5,000,000$ 75 79 75 76.33 77 76.50 76,794,694 $ Oct-27 Dec-29 The Don Shalvey
Apartments - 710 N
American St 5 Visionary Home Builders Low/Mod Families 108 83,978,508$ 777,579 $ 5,000,000$ 71 79 77 75.67 74 75.25 67,926,201 $ Oct-27 Dec-29 Fairview Terrace -
2222 S Airport Way 6 Mutual Housing CA Seniors 55+ 75 40,226,856$ 536,358 $ 2,800,000$ 67 76 75 72.67 62 70.00 -$ Apr-26 Dec-27 Danny Drive -
6303 Danny Dr 2
Delta Community Developers
Corp Seniors 62+ 65 $ 39,744,335 611,451 $ 4,179,838$ 64 75 77 72.00 61 69.25 31,649,133 $ Nov-27 5/31/2029 The Brix -
242 N Sutter St. 5
Community Revitalization
Development Low/Mod Families 39 $ 12,240,948 313,870 $ 2,603,154$ 58 73 70 67.00 57 64.50 1,865,483 $ 1/2027*** 2/2028*** Alicia's Place -
1625 French Camp
6 RHCB Development LP Veterans - Homeless/At Risk 76 39,408,000$ 518,526 $ 3,100,000$ 68 69 61 66.00 65 65.75 36,308,000 $ 5/1/2027*** 6/1/2028*** Rubino Properties -
1902 E Market St & 137 C
St. 5 DCDC Formerly Incarcerated/At Risk 12 3,533,298$ 294,442 $ 3,533,298$ 49 70 64 61.00 47 57.50 -$ Nov-27 5/31/2028 Ruhl Building Community
Rev. Proj -
521 E Main St. 5 Parents By Choice TAY / At Risk 15 8,500,000$ 566,667 $ 2,000,000$ 58 59 39 52.00 50 51.50 6,500,000 $ 2027*** 2028*** 522 323,316,013$ 619,379$ 28,216,290$
11,979,838$
2025 HOUSING NOFA SCORING MATRIX
* Does not include any managers units
** Per Unit cost excludes managers unit
*** Estimate extended approx. 6 months by staff due to funding completion gap and/or Environmental Req's Total Recommended w/ 1 Visionary Project
ATTACHMENT I
Resolution No.
STOCKTON CITY COUNCIL
ADOPT A RESOLUTION DE -OBLIGATING PREVIOU SLY ALLOCATED
AFFORDABLE HOUSING FUNDING AND APPROVING AFFORDABLE HOUSING LOAN AWARDS TO ELIGIBLE RESPONDENTS TO THE 2025 AFFORDABLE
HOUSING NOTICE OF FUNDING AVAILABILITY (NOFA)
Prior to making recommendations for the 2025 Notice of Funding Availability affordable housing loan awards (2025 Housing NOFA), City of Stockton (City) staff reviewed past funding allocations to ensure all funding was moving toward the construction of tangible affordable housing units by applicable funding expenditure deadlines; and
The Sierra Vista III project was identified as 1) having been allocated funding more than three years ago; 2) unlikely to commence construction in the next three years; and 3) the source of funding was on a “use it or lose it” basis; and
Based on these findings, and confirmed by the developer, it is recommended that $1,614,000 of HOME and LMIHF funding from the Sierra Vista, Phase III project, with Delta Community Developers Corporation (DCDC) be de-obligated. Original allocations include: Resolution Numbers 2019 -04-02-1119 and 2020-01-28-1401. De-obligation of these funds will allow for the re-allocation of funds to the best projects submitted through the 2025 Housing NOFA process; and
On October 30, 2025, the Economic Development Department (EDD) released the 2025 Housing NOFA to interested parties announcing the availability of funds for the development or preservation of affordable housing units in Stockton; and
The 2025 Housing NOFA information was sent to more than 300 community stakeholder contacts (including housing developers), shared via multiple socia l media platforms, posted on the City’s official website, and EDD issued a public media press release; and
The 2025 Housing NOFA made funds available to provide financing for property acquisition, housing construction, property rehabilitation/conversion with the end goal of producing multi-family affordable rental housing projects; and
The 2025 Housing NOFA resulted in the submittal of eight (8) applications from developers, requesting approximately $28.2 million of City affordable housing funds; and
In addition to overall application and document review, EDD staff and TDA Consulting Inc. reviewed all proformas and conducted preliminary underwriting analysis of all project proposals received; and
A risk assessment of each applicant and its proposal was conducted to ensure the selected applicant has the ability to comply with funding requirements; and
Due to the proposed public financing, the development of the projects must be approved pursuant to Article XXXIV (34) of the California Constitution, which requires a local election to approve affordable housing projects; and
In 2010, local voters gave the City Council the authority to approve up to 500 units per year. The proposed units are within this limit; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF STOCKTON, AS FOLLOWS:
1. Approve the de-obligation of $1,614,000 of HOME Investment Partnerships Program (HOME) and Low-and Moderate-income Housing Fund (LMIHF ) funding from the Sierra Vista, Phase III project, (Delta Community Devel opers Corporation (DCDC), developer).
2. Approve loans to the following three affordable housing developments in the amounts specified , provided that, as a condition of funding, the borrower demonstrates to the City Manager’s or designee’s satisfaction that each project meets the underwriting and general requirements of the 2025 Housing NOFA guidelines:
a. $5,000,000 to Visionary Home Bui lders for the development of either The View at Channel (132 units) or The Don Shalvey Apartment (1 08 units) projects, dependent on which project achieves full funding to construct first.
b. $2,800,000 to Mutual Housing for the development of the Fairview Terrace (76 units) project.
c. $4,179,838 to DCDC for the development of the Danny Drive (6 6 units) project.
Funding sources for the loans can include use of any combination of HOME, HOME-ARP, LMIHF, PLHA, NSP, Community Development Block Grant (CDBG), and/or Homeless Housing Assistance and Prevention (HHAP), based on eligibility and timeliness of the funding source(s) at the time of full project funding commitments and construction schedule.
The loans shall have a 55-year loan term with interest accruing at 3% and repayment made from residual receipts, proportionate to the City loan percentage of total permanent funding. Residual receipts are the amount of revenue remaining after all operating expenses are paid. If the annual residual receipt payments do not pay off the loan, the remaining balance would be due as a lump sum at the end of the 55-year term.
A Deed of Trust, Promissory Note, and Regulatory Agreement will be executed to secure the City’s investment and affordability of the units. The loan proceeds may be used by the developer for pre -development costs, construction costs, and development consultant costs. HOME-funded projects will have a 55 -year loan term with a 20 -year affordability period, consistent with the maximum affordability period recommen ded for HOME - assisted projects; a longer affordability period may be imposed if the project is also supported with state HCD funds; and
3. Approve the allocation of: up to 132 -units of affordable housing units to Visionary Home Builders for The View at Channel or the Don Shalvey Apartment projects; up to 76 units to Mutual Housing for the Fairview Terrace project; and, up to 6 6 units to DCDC for the Danny Drive project pursuant to Article XXXIV of the California Constitution.
4. Authorize the City Manager, or designee, to de -obligate and reallocate funding allocations awarded under this resolution if any project is unable to meet the underwriting and general requirements of the 2025 Housing NOFA, including but not limited to abili ty to meet securing of full funding stack deadlines, construction start deadlines, and/or inability to meet any other City requirements, including underwriting program guidelines. If defunded, the City Manager is authorized to reallocate the funding to eligible projects that have competed in a City of Stockton Housing NOFA that can meet the funding source agency timeliness and general City affordable housing program guidelines.
5. Authorize the City Manager, or designee, to take actions that are necessary and appropriate to carry out the purpose and intent of this Resolution, including the execution of loan documents, subordination agreements, and the reallocation of funding sources, if necessary.
PASSED, APPROVED, and ADOPTED March 31, 2026 .
CHRISTINA FUGAZI
Mayor of the City of Stockton
ATTEST:
KATHERINE ROLAND, CMC, CPMC
City Clerk of the City of Stockton
City of Stockton
Legislation Text
File #: 26-0310, Version: 1
FY 2025-26 MID-YEAR ADJUSTMENTS
RECOMMENDATION
It is recommended that the City Council approve by motion:
1. The FY 2025-26 mid-year appropriation requests that total $6,494,273, as described in Attachment A; and
2. Establishing three (3) new full-time employees (FTEs) in the Community Services Department:
1 Marketing and Social Media Analyst II; 1 Library Manager; 1 Library Assistant II.
It is also recommended that the City Council authorize the City Manager to take appropriate and necessary actions to carry out the purpose and intent of this motion.
Summary
The General Fund balance at the end of Fiscal Year 2024-25 was $57.7 million, of which $54.7 million is assigned to the 16.7% Working Capital Reserve, leaving $3 million available for appropriation. Staff requests authority to appropriate $6,494,273 to fund critical projects and activities in the current fiscal year. If approved by Council, $2,858,296 will be appropriated in the General Fund, and $3,635,977 will be appropriated in other funds.
DISCUSSION
Background
The FY 2024-25 Q4 Year End Projection indicated an ending General Fund balance of $57,734,990, or $3,014,196 above the amount required for the 16.67% Working Capital Reserve. Departments were asked to submit mid-year requests for FY2025-26 for urgent, one-time needs. Staff reviewed the priorities identified during the February 19, 2026, City Council Planning Workshop, to guide recommendations. At the Workshop, Council members:
Identified key elements of their shared vision for the community, including:
· Being a safe and clean city,
· Economic development that results in a thriving economy, and · The investment in young people.
Affirmed the following key areas of focus:
· Public Safety
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File #: 26-0310, Version: 1
· Economic Development
· Expand Activities for Youth
· Homelessness
· Affordable Housing
· Infrastructure
Identified the following three as the highest priorities for FY 2026-2027, noting the interconnectedness with the six key focus areas listed above:
· Public Safety
· Economic Development
· Infrastructure
Staff also considered the risks and liabilities of noncompliance with legal or other statutory mandates.
Staff considered the permissible use of restricted funds to enable the completion of critical projects.
Present Situation
Staff requests authority to appropriate $6,494,273 to fund critical projects and activities in the current fiscal year.
FINANCIAL SUMMARY
Approval of this action will authorize staff to appropriate fund balances, as follows:
$2,858,296 - General Fund
$1,700,000 - CFD Maintenance Fund
$ 796,453 - Measure M / Strong Communities Fund
$ 198,524 - San Joaquin County reimbursement to Strong Communities Fund $ 941,000 - Measure W Fund
Attachment A - FY2025-26 Mid-Year Request List
Attachment B - CSD Library Positions Information Summary City of Stockton Printed on 3/26/2026Page 2 of 2
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City of Stockton
FY 2025-26 Mid Year Budget Request
Total 6,494,273 3,635,977 2,858,296
Dept. Name Council Priority Area Description of Request Mid Year Request
One time or
Ongoing
Non GF
Recommendation
Non GF
Funding
Source
GF
Recommendation
EDD Buckley Cove Dredging Project Infrastructure
Investment
The Buckley Cove Inlet Dredging Project will restore navigable depth within the inlet that extends from the main channel past the easternmost marina facility. Natural tidal activity moves salt water inland and causes silt to accumulate, gradually reducing the depth of the inlet. Without periodic dredging, boat mobility becomes increasingly restricted and may eventually be lost. There are three business properties located along the southern edge of the inlet, including the City operated Buckley Cove Boat Launch, which is the busiest public recreational water access point in the Stockton region. Maintaining safe and reliable access for boats is essential to support business activity, public use, and overall operational safety in this area. The total estimated cost for this project is 4.7 million dollars. A total of 2.5 million dollars has been identified to partially fund this project through the Boat Launch Fund, General Fund discretionary dollars from a prior year, and the RiverPoint Lease Agreement. The remaining funding gap is being requested as part of this proposal.
Of the requested amount, 500,000 dollars is expected to be repaid to the City through the Pacific Boat Service lease agreement over a ten year period beginning in 2027. 2,200,000 One time 1,700,000 CFD Reserve 500,000 PD Replace Range House Infrastructure
Investment
Purchase and install new modular building to replace the existing firing range house. Estimate includes the removal and disposal of the existing structure. 750,000 One time 750,000 Measure W -
CSD Library and Marketing Support Growth in circulation and programming at libraries (City and County) requires three new additional staff to assist with expanding outreach and awareness of programs,as well as staffing to manage and provide oversight for the programs and services offered. This is an ongoing request that requires implementation as a mid-year adjustment.
431,988 Ongoing 431,988 Measure M/
SJ County
-
CSD Louis Park Recreation Bleachers Infrastructure
Investment
Following a recent inspection, it was determined that the existing bleachers were unsafe, did not meet ADA code requirements, and were recommended for demolition. Funding is requested to improve and install new code-compliant bleachers to ensure safe access for all. 417,989 One time 417,989 Measure M -
CSD Grupe Softball Field Lights Infrastructure
Investment
After recent upgrades and the installation of new lighting controls, staff identified that approximately 30% of the lamps were no longer functioning. This mid-year request will improve existing lighting and the park by replacing the failed lamps to restore proper field lighting and provide a safe space to play.
145,000 One time 145,000 Measure M -
PW Parks Maintenance and Janitorial Infrastructure
Investment
The annual cost for the Parks Maintenance Contract is $3,398,652. This would provide funds for the cost of the contract. The City entered into a 3-year contract with Al Fresco for parks/landscape maintenance services throughout the City. FY 2025-26 is year 2 of the 3 year contract. 1,499,796 One time - - 1,499,796
CAO Legal Services This increase in the Legal Services budget is due to increased investigations and the need for outside Counsel services.
250,000 One time - - 250,000
Confidential
City Manager Office Review
ATTACHMENT A
Dept. Name Council Priority Area Description of Request Mid Year Request
One time or
Ongoing
Non GF
Recommendation
Non GF
Funding
Source
GF
Recommendation
EDD Enhanced Services Infrastructure
Investment
Expand Opportunties
for Youth
The Pixie Woods Equipment Repairs/Maintenance line requires ongoing General Fundsupport to adequately sustain routine maintenance at the park. At mid-year, this account was over budget by more than $50,000, due to increased landscaping costs. The department requested ongoing General Fund support during the FY2025-26 budget development process; however, the request was not approved. Pixie Woods currently has several immediate maintenance needs, including:
train track repairs estimated at approximately $50,000, replacement of the water canal gate estimated at $30,000, which regulates and controls water inflow into the lagoon and is essential to maintaining proper lagoon water levels and overall park functionality. Additionally, the park’s annual landscaping maintenance cost is $200,000. The current available budget is insufficient to fully fund required landscaping services and other routine critical maintenance activities. 180,000 One time - - 1 80,000
CMO July 4th Celebration Funding to support Fourth of July Symphony and Celebration 150,000 O ne time - - 1 50,000 Clerk Public Input Software to ensure Brown Act Compliance with SB 707 by July 1 25,500 O ne time - - 2 5,500 ASD Pitney Bowes The Citywide postage account is regularly depleted due to the volume and costs of mailings. This augmentation will provide the department with sufficient funding to cover routine postage for citywide activities.
25,000 One time - - 25,000
ASD MUNIS Software Software to assist departments with budget development and the creation of city budget book. One- time implementation cost with ongoing expense of 32.5K. 18,000 One time - - 18,000
Mayor 35,000 One time 35,000
District 1 35,000 One time 35,000
District 2 Infrastructure
Investment
Public Safety
Kentfield Rd Police Substation 50,000 One time 50,000 M easure W - District 3 Infrastructure
Investment
Gibbons Park improvements 35,000 One time 35,000 District 4 35,000 One time 35,000
District 5 35,000 One time 35,000
District 6 Infrastructure
Investment
Public Safety
Weston Ranch Police Substation 141,000 One time 141,000 M easure W - District 6 Infrastructure
Investment
Repair broken panels of fence on French Camp Rd. 35,000 One time 35,000 Confidential
City Manager Office Review
ATTACHMENT B
Justification for Strategic Investment in Three Key Positions Advancing a New Direction for the Community Services Department (CSD)
The City of Stockton stands at a turning point in how it delivers quality of life, prevention, and opportunity to its residents.
The Community Services Department (CSD)—comprised of Recreation and the City of Stockton–San Joaquin County Public Library—has the reach, trust, and infrastructure to be a cornerstone of public safety, youth development, and community wellbeing. However, multiple independent efficiency studies (2019 Strong Communities Efficiency Study and the 2025 Efficiency Study) make one conclusion clear: the challenge facing CSD is not staff performance or commitment—it is structural and systemic capacity.
To move CSD from a collection of strong programs to a fully aligned, high-impact organization, targeted investment in three critical positions is essential. These positions directly address long- standing structural gaps, accelerate implementation, and unlock the full value of existing programs and facilities. Importantly, these positions do not impact the City’s General-Purpose Fund. Funding has already been committed through Measure M and County Library funds, making this a fiscally responsible and timely investment.
This is not an expansion for expansion’s sake. It is a strategic realignment that signals a new direction for CSD—one that is visible, accountable, prevention-focused, and results-driven.
Why This Investment Matters Now
CSD delivers services that directly influence public safety, health, education, and economic stability, often serving residents who are least connected to traditional systems. Recreation programs provide safe, structured alternatives for youth and young adults. Libraries function as trusted learning hubs, technology access points, and safe spaces for families, students, and unhoused residents.
Yet despite strong programming and recent growth, particularly in youth and teen engagement, the Department continues to struggle with three systemic constraints:
1. Limited capacity to communicate and implement at scale
2. Insufficient management structure to meet growing service complexity
3. Bottlenecks in core operational functions that delay public access to services The three proposed positions directly resolve these issues.
1. Marketing and Social Media Analyst II
One of the most persistent findings across both efficiency studies is the Department’s limited ability to tell its story and fully implement its plans. CSD offers a wide range of high-impact programs—many free or low-cost—yet awareness remains uneven, particularly among non- traditional users and underserved neighborhoods.
ATTACHMENT B
The Marketing and Social Media Analyst II will develop and execute coordinated, department- wide communication strategies; promote prevention-focused youth and family programming; expand digital, print, and community-based outreach; align messaging with Council and Mayor priorities; and ensure consistent, accurate, and timely public information.
This position directly advances Council goals related to public safety, crime prevention, youth engagement, and community trust. Funding is fully supported by Measure M and County allocations. There is no impact on the City’s General Fund.
2. Library Manager
The Stockton–San Joaquin County Public Library is operating in an environment of increasing demand and complexity. Libraries today serve as after-school environments for youth and teens, workforce and job-search hubs, technology access points, and climate-controlled daytime spaces for unhoused individuals.
Currently, three Library Managers are responsible for multiple branches while also leading systemwide programs and initiatives. Adding a fourth Library Manager allows for manageable portfolios, stronger staff supervision, focused leadership for youth and literacy services, improved customer experience, and capacity for modernization.
This position would create the leadership capacity needed to move youth and teen services from branch-by-branch efforts to coordinated, high-impact systemwide programs that support early literacy, kindergarten readiness, career and college readiness, and positive teen engagement.
This role supports Council goals related to quality of life, literacy, youth development, workforce readiness, and public safety. Funding is supported through City and County Library allocations, including Measure M. There is no impact on the City’s General Fund.
3. Library Assistant II – Technical Services
This position ensures that library materials purchased with public funds reach the community in a timely manner. Without adequate staffing, delays occur in processing materials, limiting access to new and popular items and reducing the effectiveness of library programming.
Adding this position will eliminate processing backlogs, ensure timely access to materials, improve vendor coordination, and maximize the return on the library’s materials budget. This role supports literacy, education, equity, and community wellbeing. Funding for the position is fully supported by Measure M and County allocations. There is no impact on the City’s General Fund.
Conclusion
These three positions are foundational to delivering on the City’s goals. Together, they strengthen communication, leadership, and operations across CSD, allowing the Department to function as a fully aligned, prevention-focused organization. The funding is already committed, the need is documented, and the opportunity is now.
City of Stockton
Legislation Text
File #: 26-0366, Version: 1
ACCEPT THE SINGLE AUDIT AND INDEPENDENT AUDITORS’ REPORTS FOR THE YEAR ENDED JUNE 30, 2024
RECOMMENDATION
It is recommended the City Council accept by motion the Single Audit and Independent Auditor’s Reports for the year ended June 30, 2024.
Summary
Presented for the City Council review is the City of Stockton’s Single Audit and Independent Auditor’s Reports (Attachment A) for the year ended June 30, 2024. The report includes the auditor’s opinion that the City complied, in all material respects, with the types of compliance requirements referred to in the report that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2024. The auditors identified nine (9) findings.
DISCUSSION
The Single Audit and Independent Auditor’s Reports is an annual audit of federal awards or pass- through of federal awards to the City. The auditors have issued an unmodified opinion that the City complied, in all material respects, with the compliance requirements of the grants.
During the audit, the auditor provides a review of the City’s financial reporting systems and procedures that are used to ensure accurate financial statements. An internal control is designed to provide reasonable assurance that the City meets its objectives regarding the reliability of financial reporting, effectiveness, and efficiency of operations and compliance with applicable laws and regulations. The auditor considers the City’s internal control over financial reporting during the design of audit procedures for financial statements. The auditors do not express any opinion on the effectiveness of the City’s internal controls.
Present Situation
There was little change in the City’s expenditures of federal awards compared to the previous year, increasing from $145.6 million in Fiscal Year (FY) 2022-23 to $148.1 million in FY 2023-24, or 1.7%.
Program and administrative staff have not increased sufficiently to properly administer the increase in federal awards and the variety of new programs seen in recent years. Each program has a separate set of regulations to follow. Examples of newer programs include American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Funds (ARPA), Water Infrastructure Finance and Innovation (WIFIA), and Emergency Rental Assistance passed through the State of California.
The Single Audit report identifies nine (9) findings summarized below:
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2024-001 City’s Administrative Services Department (ASD) Condition:
The City’s ASD experienced significant turnover in key finance positions and had several vacant roles during the year ended June 30, 2024. As a result, ASD encountered:
· Delays in performing timely reconciliations,
· Weaknesses in segregation of duties,
· Reduced oversight and review capacity,
· Delayed year-end close, and
· Increased reliance on audit adjustments to finalize financial statements.
City’s Corrective Actions:
The primary contributing factors were high staff turnover and vacant positions within the Accounting Services Division, which limited the division’s capacity to effectively manage daily operations and appropriate staffing levels. Recruitment and retention of qualified personnel will be prioritized to address vacancies and reduce turnover. Management will strengthen oversight and review procedures to improve accountability and consistency in financial reporting. In addition, staff training and succession planning will be implemented to reduce reliance on audit adjustments. 2024-002
Internal Control Over Financial Reporting - Year-End Closing, Reconciliation, Accuracy in Financial Reporting, and Delay in Issuance of the Single Audit Condition:
The auditor identified several observations on the internal controls over financial reporting and the year-end close process for the year ended June 30, 2024:
Year-End Closing
The City’s year-end accounting close process was both delayed and heavily reliant on post-closing adjustments. Over 100 journal entries were recorded after the initial trial balance was provided in December 2024. The City did not maintain an adequate process to ensure the accuracy of balances prior to the issuance of the trial balance for an audit. Also, several accruals related to receivables and payables were not recorded at year end when the trial balance was provided.
Reconciliation & Accuracy in Financial Reporting
· Cash and Investments / Bank Reconciliation: During the audit, the auditor noted o The March 2024 bank reconciliation had a $573,587 variance with no supporting documentation.
o The June 2024 reconciliation also had an unresolved $60,158 variance, and outstanding checks included items that had already been voided and reissued, misstating cash by $820,316 until it was corrected.
· Accounts Receivable, Year-End Accruals, and Deferred Revenue:
o During subsequent cash receipts testing to validate the completeness of accounts receivable, the auditor identified receivables totaling $2,327,191 that were not recorded in the appropriate reporting period, which resulted in several adjusting entries. In addition, during the comparison of account balances to supporting schedules, receivables totaling $1,363,346 did not reconcile to the underlying detail schedules, which were corrected through additional adjusting entries.
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o During the search for unrecorded liabilities testing performed from subsequent check registers to validate the completeness of accounts payable, the auditor noted accounts payable accruals totaling $798,871 that were not recorded in the appropriate reporting period, resulting in two additional adjusting entries.
o For unearned revenue and unavailable revenue, the City provided multiple rounds of revised supporting schedules during the audit. Differences of $604,983 and $5,356,229 were noted for unearned revenue and unavailable revenue, respectively, between the original and final schedules, as listed below.
Description Original
Schedule
Final Schedule Difference
Unearned revenue (54,679,441) (55,284,424) 604,983
Unavailable revenue 7,848,990 2,492,761 5,356,229
· Stale Balances on Receivables, and Payables: The auditor noted stale receivable and payable balances totaling $497,540 and $58,116, respectively, that remain on the City’s records and have not been periodically reviewed and resolved.
· Payroll and Related Liabilities: During the year, the City processed 5,412 retroactive payments totaling $1,670,009 to 1,383 employees to correct underpayments. Additionally, during walkthroughs and tests of controls over payroll related transaction cycle, the auditor did not observe evidence of supervisory review and approval of timesheets, whether through electronic signoff or documented manual approval.
· Compensated Absences: Testing identified five employees whose compensatory time accruals exceeded the maximum limits established by the applicable Memoranda of Understanding.
Five (5) out of eight (8) samples tested are above the maximum accrual limit for compensatory time. In total, these five (5) samples counted for 225 hours accrued in excess of the cap, representing approximately 26% of total compensatory time.
Delay in Issuance of the Single Audit
The City has experienced significant delays in the preparation and issuance of the Single Audit required under Uniform Guidance. Due to the delay in issuance of the Single Audit report, the Data Collection Form was not submitted timely.
City’s Corrective Actions:
Management acknowledges responsibility for the preparation and fair presentation of the City’s financial statements in accordance with U.S. generally accepted accounting principles (U.S. GAAP), including the design, implementation, and maintenance of effective internal controls and the timely provision of accurate financial information.
To address the identified deficiencies and prevent recurrence, management will strengthen year-end closing and financial reporting procedures by establishing and maintaining a formal year-end closing checklist and calendar that includes required accruals, revenue recognition reviews, deferred inflow classifications, and clearly assigned responsibilities with established deadlines. Monthly and year- end reconciliations will be performed and documented for all significant balance sheet accounts, including accounts receivable, payables, prepaids, deferred items, and cash. These reconciliations will be completed prior to issuance of the trial balance and will be subject to documented supervisory review and approval. All audit-proposed journal entries will be recorded to correct identified City of Stockton Printed on 3/26/2026Page 3 of 8
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misstatements, and pre-audit internal reviews will be implemented to ensure account balances are materially accurate before submission to external auditors and to minimize post-closing adjustments.
Controls over revenue recognition and deferred inflows will be enhanced through standardized review procedures, consistent reconciliation of subsidiary ledgers to the general ledger, and refresher training for accounting staff on applicable Governmental Accounting Standards Board (GASB) requirements. Regular aging reviews of receivables and payables will be performed to identify and resolve stale or unsupported balances in a timely manner.
Payroll and related controls will be strengthened through documented supervisory review and approval of all employee timesheets, payroll adjustments, rate changes, and retroactive payments prior to processing. Management will implement procedures to reduce the need for retroactive payroll corrections and will conduct periodic payroll and compensation reviews to ensure compliance with approved pay rates, labor agreements, and payroll policies. Monitoring compensatory time and leave accruals will be enhanced through system alerts for employees approaching accrual limits, regular supervisory review of accrual reports, and enforcement of policies requiring timely use or payout of compensatory time in accordance with applicable Memoranda of Understanding.
Formal written bank reconciliation procedures will be implemented requiring monthly reconciliations to be completed within established timeframes, subject to supervisory review and approval.
Reconciling items will be promptly investigated and resolved to ensure the accuracy of cash balances.
To support timely audit and compliance reporting, management will improve coordination among Finance, Human Resources, Payroll, and Grants Administration. The City will align year-end close, financial statement preparation, and audit timelines to ensure timely issuance of the Single Audit in compliance with Uniform Guidance. Clear responsibility will be assigned for preparation and timely submission of the Data Collection Form, and compliance with federal reporting deadlines will be monitored.
2024-003
Internal Control Over Preparation and Reconciliation of Schedule of Expenditures of Federal Awards
Condition:
During the audit, the City provided multiple rounds of revisions to the Schedule of Expenditures of Federal Awards (SEFA), which impacted the major program determination and the type A and type B threshold calculation.
During the review of the initial SEFA provided by the City, the auditor noted that ARPA Expenditures were reported as $35,513,281; however, the general ledger reflected expenditures of $15,225,289.
This difference changed the major program determination.
In addition, during the auditor’s review of the SEFA, they noted that for Emergency Solutions Grant awards (ESG) closed during the fiscal year 2024, the City’s initial SEFA and supporting expenditure listing were not complete and required subsequent revisions to align cumulative SEFA expenditures to cumulative drawdowns, leading to an adjustment of $26,235 additional expenditures related to grant number E-20-MW-06-0026.
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City’s Corrective Actions:
The City will enhance controls over the preparation of the SEFA by improving communication between the Finance Division and grant administering departments to ensure timely identification and accurate reporting of all federal and pass-through programs. The City will provide additional training to finance and grant management staff related to federal award identification and uniform guidance reporting requirements. In addition, the City will implement and document a quarterly reconciliation between cumulative SEFA expenditures and cumulative drawdowns by award for Housing and Urban Development (HUD) programs. This will be applied on an ongoing basis to ensure the accuracy and completeness of the SEFA, including amounts reported at award closeout. 2024-004
Allowable Costs/Cost Principles - Internal Control and Compliance Over Payroll Expenditures
Condition:
CDBG - Entitlement/Special Purpose Grants Cluster
For two (2) out of 40 payroll samples tested, employees’ benefits and compensated leave were charged to the Community Development Block Grant (CDBG) program for the pay periods selected even though the employees did not have any actual hours charged to the program.
Emergency Solutions Grant Program (ESG)
For two (2) employees out of the seven (7) tested with ESG and ESG-CV charges, payroll-related costs were charged to the ESG program even though these employees were not included on the official budget allocation file used to support the distribution of payroll costs. The exceptions consisted of benefits and compensated leave and occurred in five (5) of 23 total payroll transactions tested. In addition, the review of the disbursement reports during FY 2023-24 identified three (3) additional employees with ESG or ESG-CV payroll charges who were not included on the official budget allocation file, bringing the total to five (5) employees not included on the official budget allocation file.
Coronavirus State and Local Fiscal Recovery Funds (ARPA) The auditor’s review of the distribution reports indicated that one (1) employee who did not work on ARPA during the pay period tested had benefit costs allocated to ARPA. In addition, for one (1) out of the 40 employees tested, certain benefit amounts were charged twice to the ARPA program, with duplicate lines posted to the same expense account as regular salaries. The City indicated that the duplicate charges were due to a system setup error.
City’s Corrective Actions:
The City will strengthen internal controls over the preparation of the SEFA by implementing a formal review process over payroll expenditures to ensure costs are recorded and reported in the correct fiscal year in both the financial statements and the SEFA. The Finance Division will perform and document a fiscal year cutoff review of federal grants expenditures prior to SEFA finalization to verify amount reported agree to the general ledger for the applicable fiscal year, with documented supervisory review and approval. These procedures will be implemented and applied on an ongoing basis.
2024-005
Procurement and Suspension, and Debarment - Internal Control and Compliance Over Procurement and Verification Against the System for Award Management (SAM) City of Stockton Printed on 3/26/2026Page 5 of 8
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Condition:
Coronavirus State and Local Fiscal Recovery Funds (ARPA) During the audit, the auditor noted that 11 out of 37 suspension and debarment samples tested, the City did not have documentation on verifying the vendors against the SAM to ensure that they were not suspended or debarred from federally funded purchases.
The auditor also noted that 31 out of 37 procurement samples tested, the City didn’t have purchase orders for these samples.
Assistance to Firefighters Grant
During the audit, the auditor noted that two (2) out of two (2) procurement samples tested, the City did not have documentation on verifying the vendors against the SAM to ensure that they were not suspended or debarred from federally funded purchases.
City’s Corrective Actions:
The City acknowledges the finding and is in the process of implementing a formal procurement policy. This is currently under development and is expected to be approved by FY 2025-26. To address these issues, the City will implement standardized procurement procedures requiring the use of purchase orders and direct invoicing, documented approvals, and verification of vendors’ eligibility for all projects. Procurement policies will include suspension and debarment checking using SAM.gov, and all supporting documentation will be retained in procurement files. Staff involved in procurement and grant management will receive training to ensure consistent compliance with the updated procedures and federal regulations.
2024-006
Reporting - Internal Control and Compliance over reporting Condition:
CDBG - Entitlement/Special Purpose Grants Cluster (CDBG) The auditor noted that the City did not submit any of the four (4) quarterly Section 15011 Reports for the year ended June 30, 2024.
Coronavirus State and Local Fiscal Recovery Funds (ARPA) During testing of the City’s reporting under the ARPA Revenue Loss category, the auditor noted that the City recorded $3,570,000 in expenditures related to revenue loss that were not reported in the quarterly Project and Expenditure (P&E) reports. Additionally, the April-June 2024 P&E report, which is also included in the annual performance report, incorrectly recorded an amount in 2023 revenue loss that duplicated the same amounts reported for 2022, resulting in a change to the reported revenue loss from the previous quarter. The auditor also noted that two (2) out of four (4) quarterly P&E reports required for the year ended June 30, 2024 were submitted after the required due dates as follows:
Grant/Project Period Covered Due Date Submitted
SLT-3028-P&E Report-Q3 2023July- Sept 2023 10/31/2023 11/5/2023 SLT-3028-P&E Report-Q1 2024Jan- March 2024 4/30/2024 5/1/2024 Furthermore, the P&E report covering April-June 2024 did not include current period expenditure amounts for all projects. During the audit, the auditor found that the City reported only $11,867,558 in City of Stockton Printed on 3/26/2026Page 6 of 8
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the P&E reports instead of the actual $15,225,289 in expenditures incurred during year ended June 30, 2024.
Water Infrastructure Finance and Innovation (WIFIA)
During testing, the auditor noted that the Annual Comprehensive Financial Report (ACFR) for year ending June 30, 2024 was dated on September 17, 2025, which was after the 180 days submission deadline (December 27, 2024).
City’s Corrective Actions:
This finding is related to COVID-19 funding that was administered during the height of the pandemic, when multiple funding sources were required to be expended simultaneously. Section 15011 reporting was a new requirement within the CARES Act of 2020, to the Department and the City at that time.
By the time this issue was identified as an area of deficiency in the prior audit period, it was no longer possible to retroactively correct or report for that respective audit year, nor for the current audit period. In response to the prior audit report, the City evaluated options to centralize Section 15011 reporting, given that it falls under the Federal Funding Accountability and Transparency Act (FFATA) of 2006 and is closely tied to procurement activities of over $150,000. The City explored whether this reporting could be managed through the City’s Grant Manager position under the ASD.
The City accepts the finding of noncompliance with WIFIA reporting requirements, as the ACFR for the year ended June 30, 2024 was dated September 17, 2025, which exceeded the required 180-day submission deadline of December 27, 2024. The delay was due to challenges in completing the City- wide ACFR resulting from ongoing staff turnover. As a corrective action, the City will strengthen internal processes and oversight to ensure the ACFR is completed and submitted in a timely manner in future reporting periods.
The City will implement enhanced internal controls to ensure timely, accurate, and complete submission of Quarterly P&E Reports for both SLFRF and ARPA Revenue Loss. Corrective actions include establishing a formal internal reporting calendar with assigned responsibilities to meet Treasury deadlines, performing a documented quarterly reconciliation of general ledger obligations and expenditures to P&E report amounts, correcting prior reporting errors or duplications, and requiring supervisory review and approval of all reports before submission to the U.S. Department of the Treasury. Additionally, the City will develop standardized reporting templates, provide staff training on Treasury reporting requirements, and maintain oversight by the Finance Director to ensure ongoing compliance, accuracy, and timely reporting of all expenditures. 2024-007
Special Tests and Provisions - Internal Control Over Environmental Reviews Condition:
During testing of environmental review records, one (1) of 21 environmental review records tested did not include a signature from the responsible official. Although the environmental review documentation and supporting analysis were present, the Environmental Review Record (ERR) lacked the required signature from the certifying official, as required by HUD regulations.
City’s Corrective Actions:
Out of a sample size of 21 files, one (1) environmental review document was missing the required City of Stockton Printed on 3/26/2026Page 7 of 8
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signatures. Current procedural documentation states that after the environmental review document is completed by the project manager, it is to be routed to the First Level Reviewer (Division Manager), then to the Certifying Officer for signature. The Department will diligently ensure that the documentation is completed and routed through the approval process and will make this a priority 2024-008
Special Tests and Provisions - Internal Control and Compliance Over Obligation, Expenditure, Payment Requirements
Condition:
During the audit, the auditor noted that for four (4) out of five (5) total sub-recipients tested this year, the ESG Grant Fund obligated to sub-recipients under obligation testing were outside of the obligation timeframe of 180 days in case of ESG and 240 days in case of ESG CV without further justifications.
In addition, the auditor noted two (2) out of three (3) samples selected for payment requirements testing were outside of 30 days window without further justifications.
City’s Corrective Actions:
The City has since implemented policies and procedures to ensure timely issuance of award letters to satisfy the 180-day obligation requirement, and processing of payments within 30 days of receipt of complete documentation, or to document the reason payment cannot be processed. Staff will continue to follow and improve compliance with these established processes and procedures to ensure timely contract execution and payment processing. While unforeseen circumstances may occasionally cause delays, such instances will be documented and addressed promptly. 2024-009
Special Tests and Provisions - Internal Control and Compliance over Housing Quality Standards
Condition:
During the audit, the auditor noted that the City has not performed any housing inspections required under the Housing Opportunities Made Equal (HOME) Investment Partnerships Program since 2019, citing staff shortages as the reason for nonperformance. Inspections are required every one (1) to three (3) years, depending on the number of housing units contained in the project.
City’s Corrective Actions:
HOME on-site monitoring requires dedicated staffing capacity. The Housing Division of the City’s Economic Development Department (EDD) has developed clear policies and procedures for HOME on-site monitoring; however, implementation has been constrained by limited staffing resources. EDD has requested additional staff in the most recent budget development cycles to support these requirements but has not been successful. EDD is evaluating alternative solutions, including the potential use of third-party consultants, to support implementation of HOME on-site monitoring requirements.
FINANCIAL SUMMARY
There is no financial impact associated with accepting these reports.
Attachment A - 2024 Single Audit and Independent Auditors’ Reports City of Stockton Printed on 3/26/2026Page 8 of 8
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City of Stockton
Stockton, California
Single Audit
and Independent Auditor’s Reports
For the Year Ended June 30, 2024
ATTACHMENT A
ATTACHMENT A
City of Stockton
Single Audit Report
For the Year Ended June 30, 2024
Table of Contents
Page
Independent Auditor’s Reports:
Report on Internal Control Over Financial Reporting and on Compliance and Other Matt
ers Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards .................................................................. 1 Report on Compliance for Each Major Federal Program;
Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance ........................................................ 3 Schedule of Expenditures of Federal Awards .................................................................................... ........................ 6 Notes to the Schedule of Expenditures of Federal Awards ........................................................................................ 9 Schedule of Findings and Questioned Costs ............................................................................................................ 10
ATTACHMENT A
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ATTACHMENT A
6 Hutton Centre Drive, Suite 1200
Santa Ana, California 92707
REPORT ON INTERNAL CONT
ROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditor’s Report
To the Honorable Mayor and Members of City Coun
cil
of the City of Stockton
Stockton, California
We have audited, in accordance with the auditing standa rds generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (“ Government Auditing Standards ”), the financial statemen ts of the governmental activities, the business-type activities, each major fund, and th e aggregate remaining fund information of the City of Stockton, California (the “City”), as of and for the year e nded June 30, 2024, and the re lated notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated September 17, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial stat ements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal c ontrol. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assi gned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or signifi cant deficiencies may exist that were not identified. We identified certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs as items 2024-001, 2024-002 and 2024-003 that we consider to be material weaknesses.
ATTACHMENT A
To the Honorable Mayor and Members of City Council
of the City of Stockton
Stockton, California
2 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, cont racts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are require to be reported under Government Auditing Standards.
City’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the acco mpanying schedule of findings and questioned costs. The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entit y’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Santa Ana, California
September 17, 2025
ATTACHMENT A
6 Hutton Centre Drive, Suite 1200
Santa Ana, California 92707
REPORT ON COMPLIANCE FO
R EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL
CONTROL OVER COMPLIANCE; AND REPORT ON THE SCHEDULE OF EXPENDITURES OF
FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE
Independent Auditor’s Report
To the Honorable Mayor and Members of City Council
of the City of Stockton
Stockton, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Stockton, California’s (the “City”) compliance with the types of compliance requirements identified as subject to audit in the OM
B Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for th e year ended June 30, 2024. The City’s major federal programs are identified in the summary of auditor’s resu lts section of the accompanying schedule of findings and questioned costs.
In our opinion, the City complied, in all material resp ects, with the types of compliance re quirements r eferred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2024.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; t h
e standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Princi ples, and Audit Requirements for Federal Awards (the “Uniform Guidance”). Our responsibilities under those standard s and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of C ity and to meet our other ethical res ponsibilities, in accordance with relevant ethical requirements
relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on complia nce for each major federal program. Our audit does not provide a legal determination of City’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for comp liance with the requirements referred to above and for the design , implementati
on, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to City’s federal programs.
ATTACHMENT A
To the Honorable Mayor and Members of City Council
of the City of Stockton
Stockton, California
4 Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect materi al noncompliance when it exists. The risk of not detecting material noncompliance resulti ng from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misr epresentations, or the override of internal control.
Noncompliance with the compliance require ments referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about City’s compliance with the requirements of each major federal program as a whole.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards , and the Uniform Guidance, we
exercise professional judgment and maintain professional skepticism throughout the audit.
identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Su ch procedures include examining, on a test basis, evidence regarding City’s complian ce with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
obtain an understanding of City’s inte rnal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstan ces and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of City’s internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.
Other Matters
The results of our auditing procedures disclosed instances of noncompliance wh ich are required to be reported in accordance with the Uniform Guidance and which are described in the accompanying schedule of findings and questioned costs as items 2024-004, 2024-005, 2024-006, 2024-008, and 2024-009. Our opinion on each major federal program is not modified with respect to these matters.
Government Auditing Standards requires the auditor to perform limited procedures on City’s response to the noncompliance findings identified in our audit described in the accompanying schedule of findings and questioned costs. City’s response was not subjected to the other a uditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.
Report on Internal Control Over Compliance
Our consideration of internal control over compliance was for the limited purpose d escribed in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or sign ificant deficiencies in internal control over compliance and therefore, material weaknesses or signifi cant deficiencies may exist that were not identified.
However, as discussed below, we did identify certain defi ciencies in internal contro l over compliance that we consider to be material weaknesses and significant deficiencies.
ATTACHMENT A
To the Honorable Mayor and Members of City Council
of the City of Stockton
Stockton, California
5 A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal c ourse of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of complian ce requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal progr am will not be prevented, or detected and corrected, on a timely basis. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items 2024-004, 2024-005, 2024-006, 2024-008, and 2024-009 to be material weaknesses.
A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a t ype of compliance requirement of a federal program that is less severe than a material weakness in internal control ov er compliance, yet important enough to merit attention by those charged with governance. We consider the deficiency in internal c ontrol over compliance described in the accompanying schedule of findings and questioned costs as item 2024-007 to be a significant deficiency.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
Government Auditing Standards requires the auditor to perform limited pr ocedures City’s response to the internal control over compliance findings identified in our comp liance audit described in the accompanying schedule of findings and questioned costs. The City’s response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance.
Accordingly, this report is not suitable for any other purpose.
Report on the Schedule of Expenditures of Federal Awards Required by Uniform Guidance We have audited the financial statements of the governmental activiti es, the business-type activities, each major fund, and the aggregate remaining fund informa tion of the City as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated September 17, 2025, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming our opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying Sche dule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Uniform Guid ance and is not a required part of the basic financial statements. Such information is the re sponsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare th e basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain other procedures, including comparing and reconciling such information direc tly to the underlying accounting and other records used to prepare the basic financial statements or to the basic fina ncial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditure of Federal Awards is fairly stated in all material resp ects in relation to the basic financial statements as a whole.
Santa Ana, California
February 11, 2026, except for the Schedule of Expenditures of Federal Awards, which is as of September 17, 2025.
ATTACHMENT A
City of Stockton
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2024
See accompanying Notes to the Schedule of Expenditures of Federal Awards. 6 Assistance Amount
Listing Grant Award Federal Provided to
Number Number Expenditures Subrecipients
U.S. Department of Housing and Urban Development
Direct Program:
CDBG - Entitlement/Special Purpose Grants Cluster:
Community Development Block Grants/Entitlement Grants 14.218 B-17-MC-06-0026 125,337$ 78,450$ Community Development Block Grants/Entitlement Grants 14.218 B-19-MC-06-0026 7,900 - Community Development Block Grants/Entitlement Grants 14.218 B-20-MC-06-0026 122,820 6,250 Community Development Block Grants/Entitlement Grants 14.218 B-21-MC-06-0026 2,661,066 1,016,196 Community Development Block Grants/Entitlement Grants 14.218 B-22-MC-06-0026 2,443,933 2,443,933 Community Development Block Grants/Entitlement Grants 14.218 B-23-MC-06-0026 1,033,055 327,511 Community Development Block Grants/Entitlement Grants 14.218 Revolving Loan 412,144 412,144 Community Development Block Grants/Entitlement Grants 14.218 Program Income 1,345,411 937,335 COVID 19 - Community Development Block Grant Program 14.218 B-20-MW-06-0026 317,215 239,108 Total CDBG - Entitlement/Special Purpose Grants Cluster 8,468,881 5,460,927 Emergency Solutions Grant Program 14.231 E-21-MC-06-0026 3,755 3,755 Emergency Solutions Grant Program 14.231 E-22-MC-06-0026 150,977 150,977 Emergency Solutions Grant Program 14.231 E-23-MC-06-0026 81,687 62,461 COVID 19 - Emergency Solutions Grant Program 14.231 E-20-MW-06-0026 85,353 76,171 Total Emergency Solutions Grant Program 321,772 293,364 HOME Investment Partnerships Program 14.239 M-17-MC-06-0221 683,571 683,571 HOME Investment Partnerships Program 14.239 M-21-MC-06-0221 148,018 - HOME Investment Partnerships Program 14.239 M-22-MC-06-0221 36,000 - COVID 19 - HOME Investment Partnership American Rescue Plan 14.239 M-21-MP-06-0221 713,183 703,893 Total HOME Investment Partnership Program 1,580,772 1,387,464 Total U.S. Department of Housing and Urban Development 10,371,425 7,141,755 U.S. Department of Justice
Direct Program:
Byrne Discretionary Grants Program 16.753 15PBJA-22-GG-00124-BRND 262,461 - Total Byrne Discretionary Grants Program 262,461 - Pass-Through San Joaquin County District Attorney’s Office:
Local Law Enforcement CGIC Integration Initiative 16.738 15PBJA-22-GG-01760-MUMU 372,347 149,963 Edward Byrne Memorial Justice Assistance Grant Program 16.738 15PBJA-23-GG-03183-JAGX 94,788 87,465 Edward Byrne Memorial Justice Assistance Grant Program 16.738 15PBJA-21-GG-01198-JAGX 200,463 190,832 Edward Byrne Memorial Justice Assistance Grant Program 16.738 15PBJA-22-GG-02064-JAGX 255,412 191,230 Total Edward Bryne Memorial Justice Assistance Grant Program 923,010 619,490 Total U.S. Department of Justice 1,185,471 619,490 U.S. Department of Transportation
Pass-Through State of
California Department of Transportation:
Highway Planning and Construction Cluster:
TREET RESURF FED AID ST 20.205 HIPSTPL-5008(207) 11,854 - BUS RAPID TRANSIT I-B 20.205 CML-5008(148) 224,743 - Bus Rapid Transit Phase V 20.205 CML-5008(149) 809,882 - Guardrail, Transition Rail 20.205 HSIPL-5008(152) 11,890 - WST LN TRS CONTROL SYS 20.205 CML-5008(165) 819,111 - Federal Grantor/Pass-Through Grantor
Program Title
ATTACHMENT A
City of Stockton
Schedule of Expenditures of Federal Awards (Continued)
For the Year Ended June 30, 2024
See accompanying Notes to the Schedule of Expenditures of Federal Awards. 7 Assistance Amount
Listing Grant Award Federal Provided to
Number Number Expenditures Subrecipients
U.S. Department of Transportation (continued)
Pass-Through State of California Department of Transportation (Continued):
Highway Planning and Construction Cluster (Continued):
Bear Creek/Piley Slough Bike 20.205 CML-5008(175) 301,522 - HSIP 8-Convt Signal Fr Ped 20.205 HSIPL-5008(166) 1,301 - HSIP 8-Road Diet @ El Dorado 20.205 HSIPL-5008(162) 8,999 - Lincoln/ 8th Roundabout 20.205 CML-5008(176) 56,912 - Pacific/March Intrsec Mod 20.205 CML-5008(181) 357,988 - Realtime Traffic Flow Monitor 20.205 CML-5008(180) 126,201 - Bridge rehab & replacement 20.205 BPMP-5008(201) 3,504 - HSIP 9-LT El Dorado/March 20.205 HSIPL-5008(183) 676,547 - HSIP 9-LT Airport/Hazeltn. 20.205 HSIPL-5008(184) 1,284,433 - HSIP 9-Sidewlk Med Mlk Bl. 20.205 HSIPL-5008(186) 217,405 - HSIP 9-Rec Rpd Flsh Bcons. 20.205 HSIPL-5008(185) 27,645 - Transp Mgmt Ctr Equip Upg. 20.205 CMSTPL-5008(191) 30,979 - Arch-airport Rd Ts 20.205 CML-5008(192) 331,051 -
West Lane Quene Cutter 20.205 STPLR-7500(289) 88,457 - HSIP 11 EL DORADO ST PED & BIC. 20.205 HSIPL-5008(210) 1,913 - SWAIN RD & MORGAN PL ROUNDABOUT 20.205 CRPL-5008(213) 12,459 - Total Highway Planning and Construction Cluster: 5,404,796 - Pass-Through State of California Office of Traffic Safety:
Highway Safety Cluster:
State and Community Highway Safety 20.600 PT23181 36,887 - State and Community Highway Safety 20.600 PT24202 116,061 - Total Highway Safety Cluster 152,948 -
Minimum
Penalties for Repeat Offenders for Driving While Intoxicated 20.608 PT23181 35,692 - Minimum Penalties for Repeat Offenders for Driving While Intoxicated 20.608 PT24202 156,475 - Total Minimum Penalties for Repeat Offenders for Driving While Intoxicated 192,167 - Total U.S. Department of Transportation 5,749,911 -
U.S. Treasury
Direct Program:
COVID 19 - Coronavirus State and Local Fiscal Recovery Funds 21.027 N/A 15,225,289 - Pass-Through State of California Department of Housing and Community Development:
COVID 19 - Coronavirus State and Local Fiscal Recovery Funds 21.027 22-HK-17482 1,696,084 1,696,084 Pass-Through State Water Resources Control Board
COVID 19 - Coronavirus State and Local Fiscal Recovery Funds 21.027 A00155-01 1,957,881 - Total COVID 19 - Coronavirus State and Local Fiscal Recovery Funds 18,879,254 1,696,084 Emergency Rental Assistance Program:
Direct Program:
Emergency Rental Assistance Program 21.023 N/A 49,858 - Total Emergency Rental Assistance 49,858 -
Federal Grantor/Pass-Through Grantor
Program Title
ATTACHMENT A
City of Stockton
Schedule of Expenditures of Federal Awards (Continued)
For the Year Ended June 30, 2024
See accompanying Notes to the Schedule of Expenditures of Federal Awards. 8 Assistance Amount
Listing Grant Award Federal Provided to
Number Number Expenditures Subrecipients
U.S. Small Business Administration
Direct Program:
Congressional Earmarks Initiative 59.059 SBAHQ22I0043 7,353 - Total U.S. Small Business Administration 7,353 - U.S. Environmental Protection Agency
Direct Program:
Brownfields Assessment and Cleanup Cooperative 66.818 99T74401 71,740 - Water Infrastructure Finance and Innovation (WIFIA) 66.958 N/A 108,000,000 - Total U.S. Environmental Protection Agency 108,071,740 - U.S. Department of Homeland Security
Direct Program:
Assistant to Firefighters Grant (AFG) 97.044 EMW-2021-FG-00268 687,273 - Assistant to Firefighters Grant (AFG) 97.044 EMW-2020-FG-15445 1,181,818 - Total Assistant to Firefighters Grant (AFG) 1,869,091 - Staffing for Adequate Fire and Emergency Response (SAFER) 97.083 EMW-2020-FF-01451 1,588,643 - Staffing for Adequate Fire and Emergency Response (SAFER) 97.083 EMW-2022-FF-01976 295,212 - Total Staffing for Adequate Fire and Emergency Response (SAFER) 1,883,855 - Total U.S. Department of Homeland Security 3,752,946 - Total Expenditures of Federal Awards 148,067,958$ 9,457,329$ Federal Grantor/Pass-Through Grantor
Program Title
ATTACHMENT A
City of Stockton
Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2024
9 Note 1 – Reporting Entity
The financial reporting entity consists of the primary government, City of Stockton, California (the “City”), organizations for which the primary government is financially accountable, and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete.
The City Council acts as the governing body and is able to impose its will on the following organizations, establishing financial accountability:
The Stockton Public Financing Authority
Fiduciary Component Unit:
Successor Agency of the Former Redevelopment Agency of the City of Stockton
Note 2 – Basis of Presentation
The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal award activity of City under programs of the federal government for the year ended June 30, 2024. The in formation in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the “Uniform Guidance”). Because the Schedule presents only a selected porti on of the operations of City, it is not intended to and does not present the financial position of the City. Negative amounts reflected in the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.
Note 3 – Summary of Significant Accounting Policies
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Note 4 – Indirect Cost Rate
The City has not elected to use the 10 percent de-minimis indirect rate as allowed under Uniform Guidance.
Note 5 – Loan and Loan Guarantee Programs
On September 20, 2020, the City executed a Water In frastructure Finance and Innovation Act (WIFIA) loan agreement with the U.S. Environmental Protection Agency (EPA) to refinance 2019 Bond Anticipation Note for the Regional Wastewater Control Facility upgrades. The amounts reflected in the Schedule of Expenditures of Federal Awards represent the outstanding principal balance as of July 1, 2023.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2024
10 Section I – Summary of Auditor’s Results
Financial Statements
Types of report the auditors issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified
Internal control over financial reporting:
Material weakness(es) identified? 2024-001, 2024-002 and 2024-003
Significant deficiency(ies) identified? None Reported
Noncompliance material to financial statements noted? No
Federal Awards
Internal control over major federal programs:
Material weakness(es) identified? 2024- 004, 2024-005, 2024-006, 2024-008,
and 2024-009
Significant deficiency(ies) identified? 2024-007
Type of auditor’s report issued on compliance for major federal programs: Unmodified
Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? Yes
Identification of major federal programs:
Assistance Listing Federal
Number(s) Name of Federal Program or Cluster Expenditures
14.218 CDBG - Entitlement/Special Purpose Grants Cluster 8,468,881 $
14.231 Emergency Solutions Grants Program 321,772
14.239 HOME Investment Partnerships Program 1,580,772
21.027 Coronavirus State and Local Fiscal Recovery Funds 18,879,254
66.958 Water Infrastructure Finance and Innovation (WIFIA) 108,000,000
97.044 Assistance to Firefighters Grant 1,869,091
Total Expenditures of All Major Federal Programs 139,119,770$ Total Expenditures of Federal Awards 148,067,958$
Percentage of Total Expenditures of Federal Awards 93.96%
Dollar threshold used to distinguish between type A and type B programs: $1,202,039
Auditee qualified as low-risk auditee under 2 CFR 500.520? No
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
11 Section II – Financial Statements Findings
A. Current Year Findings– Financial Statement Findings
2024-001 – City’s Administrative Services Department (“ASD”)
Criteria:
The control environment is the foundation of an effective internal control system. It sets the tone of the organization and influences the control consciousness of its people. A strong control environment supports the achievement of strategic objectives, reliable financial re porting, operational efficiency, compliance with laws and regulations, and safeguarding of assets.
A well-functioning Administrative Services Department is essential to maintaining this environment. This includes having qualified accounting personnel, adequate segre gation of duties, and sufficient oversight to ensure accurate and timely financial reporting.
Condition:
The City’s ASD experienced significant turnover in key finance positions and had several vacant roles during the year ended June 30, 2024. As a result, the Department encountered:
Delays in performing timely reconciliations,
Weaknesses in segregation of duties,
Reduced oversight and review capacity,
Delayed year-end close, and
Increased reliance on audit adjustments to finalize financial statements.
Cause:
The primary contributing factor was the high level of staff turnover and vacant pos itions. Although some roles were filled later in the year, the ASD did not have su fficient capacity to effectively manage both day-to-day operations and year-end financial reporting responsibilities.
Context and Effect:
The staffing challenges within the AS D weakened the City’s overall control environment. These conditions increased the risk of undetected errors or irregularities, contributed to delays in financial reporting.
Recommendation:
We recommend that the City assess the structure and work load of the ASD to ensure efficient operations. In addition, prioritizing the recruitment and retention of qualified personnel is essential to maintaining a skilled and capable workforce. The City should also strengthen ove rsight and review procedures to enhance accountability and transparency. Finally, implementing staff training and succession planning will help reduce reliance on audit adjustments and promote greater consistency in financial reporting.
Views of Responsible Officials:
Management concurs with the finding.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
12 Section II – Financial Statements Findings (Continued)
A. Current Year Findings– Financial Statement Findings (Continued)
2024-002 – Internal Control Over Financial Reporting – Year-End Closing, Reconciliation, Accuracy in Financial Reporting, and Delay in Issuance of the Single Audit
Criteria:
Management is responsible for the preparation and fair presentation as well as the accuracy of its financial statements including disclosures in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”); this includes the design, implementation, and maintena nce of internal control relevant to the preparation and fair presentation of fina ncial statements that are free from material misstatement, whether due to fraud or error. As part of satisfying th at responsibility, management should ensure complete year- end closing and diligently produce reliable and accurate financial information.
Generally accepted auditing standards defined internal control as a process designed to provide reasonable assurance regarding the achievement of objectives in the following categories:
Reliability of financial reporting
Effectiveness and efficiency of operations, and
Compliance with applicable laws and regulations.
In essence, accounting policies and procedures would aid the City in providing training for accounting personnel, communicating and providing a source of reference to approved policies, and ma intaining consistency of recording financial transactions.
Management is responsible for providi ng timely and accurate financial inform ation. Since the City has expended over $750,000 of expenditures of federal awards, Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Aware (“Uniform Guidance”), states the City is required to submit the Data Collection Form and the reporting package to the Federal Audit Clearinghouse and the State Controller’s Offi ce, which include the Basic Financial Statements of the City, within the earlier of 30 days after receipt of aud itor’s report, or nine months after the end of the audit period.
Condition:
We identified several observations on the internal contro ls over financial reporting and the year-end close process for the year ended June 30, 2024:
Year-End Closing:
The City’s year-end accounting close process was both delayed and heavily reliant on post-closing adjustments.
Over 100 journal entries were recorded after the initial trial balance was provided in December 2024. The City did not maintain an adequate process to ensure the accuracy of balances prior to the issuance of the trial balance for an audit. We also observed that several accruals rela ted to receivables and payables were not recorded at year end when the trial balance was provided.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
13 Section II – Financial Statements Findings (Continued)
A. Current Year Findings– Financial Statement Findings (Continued)
2024-002 – Internal Control Over Financial Reporting – Year-End Closing, Reconciliation, Accuracy in Financial Reporting, and Delay in Issuance of the Single Audit (Continued)
Condition (Continued):
Reconciliation & Accuracy in Financial Reporting
Cash and Investments / Bank Reconciliation: During the audit, we noted
o The March 2024 bank reconciliation had a $573,587 variance with no supporting documentation. o The June 2024 reconciliation also had an unresolv ed $60,158 variance, and outstanding checks included items that had already been voided and reissued, misstating cash by $820,316 until it was corrected.
Accounts Receivable, Year-End Accruals, and Deferred Revenue:
o During subsequent cash receipts testing to valid ate the completeness of accounts receivable, we identified receivables totaling $2,327,191 that were not recorded in the appropriate reporting period, which resulted in several adjusting entries. In addition, during our comparison of account balances to supporting schedules, we noted receivables totali ng $1,363,346 that did not reconcile to the underlying detail schedules, which were corrected through additional adjusting entries. o Additionally, during the search for unrecorded liab ilities testing performed from subsequent check registers to validate the completeness of account s payable, we noted accounts payable accruals totaling $798,871 that were not recorded in the appropriate reporting period, resulting in two additional adjusting entries.
o For unearned revenue and unavailable revenue, we received multiple rounds of revised supporting schedules during the audit. Differences of $604,983 and $5,356,229 were noted for unearned revenue and unavailable revenue, respectively, between the original and final schedules, as listed below.
Description Original Schedule Final Schedule Difference Unearned revenue (54,679,441) (55,284,424) 604,983 Unavailable revenue 7,848,990 2,492,761 5,356,229
Stale Balances on Receivables, and Payables: We noted stale receivable and payable balances totaling $497,540 and $58,116, respectively, that remain on the City’s records and have not been periodically reviewed and resolved.
Payroll and Related Liabilities: During the year, the City processed 5,412 retr oactive payments totaling $1,670,009 to 1,383 employees in order to correct underpayments. Additionally, during our walkthroughs and tests of controls over payroll related transaction cycle, we did not observe evidence of supervisory review and approval of timesheets, whether through electronic signoff or documented manual approval.
Compensated Absences: Testing identified five em ployees whose compensatory time accruals exceeded the maximum limits established by the applicable Memo randa of Understanding. Five (5) out of eight (8) samples tested are above th e maximum accrual limit for compensatory time. In total, these five (5) samples counted for 225 hours accrued in excess of the cap, representing approximately 26 percent of total compensatory time. The projected questioned cost $5,778 in fiscal year 2024.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
14 Section II – Financial Statements Findings (Continued)
A. Current Year Findings– Financial Statement Findings (Continued)
2024-002 – Internal Control Over Financial Reporting – Year-End Closing, Reconciliation, Accuracy in Financial Reporting, and Delay in Issuance of the Single Audit (Continued)
Condition (Continued):
Delay in Issuance of the Single Audit:
The City has experienced significant delays in the pr eparation and issuance of the Single Audit required under Uniform Guidance. Due to the delay in issuance of the Single Audit report , the Data Collection Form was not submitted timely.
Cause:
These deficiencies were caused by many factors including no formal process in place to conduct periodic review, limited staffing capacity, turnover in key finance positions , inadequate oversight and review procedures, and system configuration issues. The Administrative Services Department prioritized daily operations, leaving insufficient resources to perform timely reconciliations, resolve variances, and implement preventive controls.
Context and Effect:
The delayed year-end closing process, along with the rec onciliation issues and inaccuracy in financial reporting, led to the substantial number of journa l entries submitted after the initial tria l balance, which increased the risk that a material misstatement could go undetected.
The City is neither in compliance with Uniform Guidan ce nor is it meeting its current demands for external financial reporting.
Recommendation:
We recommend the City evaluate its staff size for Finance Division. The policy and procedures should also include the year-end closing procedures and the accounts to be reconciled in accordance with Governmental Accounting Standards Board Statements and provide trai ning to staff to properly pe rform the reconciliation and closing.
For the year-end accounting closing process, the City should enhance its procedures by implementing earlier review and reconciliation steps to reduce the need for pos t-closing adjustments. Ade quate staffing and training should be provided to ensure that trial balances are completed accurately and on time, minimizing delays in financial reporting.
Bank reconciliations should be comple ted on a timely basis, with all va riances promptly investigated and resolved. Additionally, outstanding check listings should be regularly reviewed and updated to prevent cash from being misstated. In terms of accounts receivable, year-e nd accruals, and deferred revenue, the department should strengthen its procedures for recording accruals and reconciling receivable balances to supporting schedules. A systematic process should be implemented to ensure th at revenues, unearned revenue, and unavailable revenue are recorded properly.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
15 Section II – Financial Statements Findings (Continued)
A. Current Year Findings– Financial Statement Findings (Continued)
2024-002 – Internal Control Over Financial Reporting – Year-End Closing, Reconciliation, and Delay in Issuance of the Single Audit (Continued)
Recommendation (Continued):
For stale balances on receivables and payables, any balances that remain unchanged across fiscal years should be reviewed and adjusted with appropriate supporting documentation.
For payroll and related liabilities, payroll processing controls should be enhanced to ensure that system changes are properly tested and monitored, with supervisory ov ersight to prevent recurring errors. Regular reviews over timesheets and payroll process should be conducted to identify any unusual or high volumes of retroactive adjustments.
For compensated absences, the payroll and accounting syst ems should be configured to enforce the Memorandum of Understanding limits on compensatory time. Monitori ng procedures should be strengthened to promptly identify and correct any accruals that exceed established caps.
Lastly, the policy and procedures should include critical due dates and develop a listing of assignment, including department coordinated items, based on available resources to meet those due dates.
Views of Responsible Officials:
Management concurs with the finding.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
16 Section II – Financial Statements Findings (Continued)
A. Current Year Findings– Financial Statement Findings (Continued)
2024-003 – Internal Control Over Preparation and Reco nciliation of Schedule of Expenditures of Federal Awards
Criteria:
2 CFR 200.302(b)(1) states that the nonfederal entity must identify in its accounts all federal awards received and expended, as well as the federal programs under whic h they were received. Federal program and award identification must include, as applicab le, the assistance listing title and numbe r, the federal award identification number and year, the name of the federal agency, and the name of the pass-through entity, if any. This information enables the auditee to reconcile amounts presen ted in the financial statements to related amounts in the schedule of expenditures of federal awards.
Pursuant to Code of Federal Regulation §200.510 Financial statements:
All auditees must:
(a) Financial statements. The auditee must prepare financ ial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The financial statements must be for the same organizational unit and fiscal year that is chosen to meet the requirements of this part. However, non-Federal entity-wide fi nancial statements may also include departments, agencies, and other organizational units that have separate audits in accordance with § 200.514(a) and prepare separate financial statements.
(b) Schedule of expenditures of Federal awards. The aud itee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in acc ordance with §200.502 Basis for dete rmining Federal aw ards expended.
While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must:
(1) List individual Federal programs by Federal agency. Fo r a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expe nded must be shown either by individual Federal award or by Federal agency and major subdivision with in the Federal agency. For example, the National Institutes of Health is a major subdivision in the Department of Health and Human Services.
(2) Provide total Federal awards expended for each individual Federal program and the assistance listing number or other identifying number when the assistance listing number information is not available. For a cluster of programs also provide the total for the cluster.
Pursuant to Code of Federal Regulation §200.514 Scope of audit:
The auditor must determine whether the financial statements of the auditee are presented fairly in all material respects in accordance with generally accepted accounting principles. The au ditor must also determine whether the schedule of expenditures of Federal awards is stated fairly in all material respects in relation to the auditee's financial statements as a whole.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
17 Section II – Financial Statements Findings (Continued)
A. Current Year Findings– Financial Statement Findings (Continued)
2024-003 – Internal Control Over Preparation and Reco nciliation of Schedule of Expenditures of Federal Awards (Continued)
Condition:
During the audit, the City provided multiple rounds of revisions to the Schedule of Expenditures of Federal Awards (“Schedule”), which impacted the major program determination and the type A and type B threshold calculation.
During our review of the initial Schedule provided by the City, we noted that ARPA Expenditures were reported as $35,513,281; however, the general ledger reflected e xpenditures of $15,225,289. This difference changed the major program determination.
In addition, during our review of the Schedule, we note d that for ESG awards closed during the fiscal year 2024, the City’s initial SEFA and supporting expenditure listing were not complete and required subsequent revisions to align cumulative SEFA expenditures to cumulative drawdow ns, leading to an adjustment of $26,235 additional expenditures related to grant number E-20-MW-06-0026.
Cause:
There was insufficient coordination between the Finance Division and program personnel responsible for grant administration, and the City lacked adequate procedures to ensure the completeness and accuracy of information used for SEFA reporting.
In addition, the City did not perform timely rec onciliations between cumulative SEFA expenditures and cumulative drawdowns for ESG awards during the grant pe riod, which contributed to the need for revisions during the year end close.
Context and Effect:
With a vacancy in the grants department and the receipt of unprecedented COVID relief pass-through funding, the City experienced difficulty maintaining accurate and timely SEFA reporting. As a result, multiple revisions to the SEFA were required, which may affect the accuracy of major program determination and increase the risk of errors in SEFA reporting.
Recommendation:
We recommend frequent communication between the Fina nce Division and other departments in identifying federal programs. In addition, we recommend the City pr ovide more training to both grant management staff and finance staff to enhance the skill in identifying pass through programs and ensure the accuracy and completeness of the Schedule.
We further recommend the City impl ement and document a periodic reconciliation, at least quarterly, between cumulative Schedule expenditures and cumulative drawdowns by award for U.S. Department of Housing and Urban Development pass through programs, including Em ergency Solutions Grant awards. This reconciliation should be reviewed and approved by supervisory personnel and reta ined to support the accuracy and completeness of the Schedule, including amounts reported during award closeout.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
18 Section II – Financial Statements Findings (Continued)
A. Current Year Findings– Financial Statement Findings (Continued)
2024-003 – Internal Control Over Preparation and Reco nciliation of Schedule of Expenditures of Federal Awards (Continued)
Views of Responsible Officials and Planned Corrective Actions:
Management concurs with the finding.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
19 Section II – Financial Statements Findings (Continued)
B. Prior Year Findings – Financial Statement Findings
2023-001 – Internal Control Over Financial Reportin g – Prior Year Adjustments, Year-End Closing, Reconciliation, and Delay in Issuance of the Single Audit
Condition:
During the year ended June 30, 2023, the City reported several corrections impacting the Net Position and Fund Balances:
1. The Governmental Activities Net Position was adjusted by $(34,536,104) due to corrections on unavailable revenue and unearned revenue.
2. The Special Revenue Fund Balance was adjusted by $(38,524,453) due to corrections on unavailable revenue, unearned revenue, and revenue recognition.
3. The Other Governmental Fund Balance was adjusted by $621,346 due to corrections on revenue recognition.
During the audit, we noted stale receivables and payables to be reconciled from the subsidiary ledgers to the general ledgers.
The City has experienced significant delays in the pr eparation and issuance of the Single Audit required under Uniform Guidance. Due to the delay in issuance of the Single Audit report , the Data Collection Form was not submitted timely.
Recommendation:
We recommended the City evaluate its staff size for Finance Division. We also recommended the City update and follow its policy to review and reconc ile the unavailable revenue related to grants. The policy and procedures should also include the year-end closing procedures and the accounts to be reconciled in accordance with Governmental Accounting Standards Board Statements a nd provide training to staff to properly perform the reconciliation and closing.
In addition, the policy and procedures should include critical due dates and develop a listing of assignment, including department coordinated items, based on available resources to meet those due dates.
Status:
Not implemented. See current year finding 2024-002.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
20 Section II – Financial Statements Findings (Continued)
B. Prior Year Findings– Financial Statement Findings (Continued)
2023-002 – Internal Control Over Preparation of Schedule of Expenditures of Federal Awards
Condition:
During the audit, the City provided multiple rounds of revisions to the Schedule of Expenditures of Federal Awards (“Schedule”), which impacted the major program determination and the type A and type B threshold calculation.
During our review of the Schedule provided by the City, we noted the Homekey Program Round 1, passed through the State of California in the amount of $2,7 79,929 was excluded from the Schedule in the previous years.
Recommendation:
We recommended frequent communication between the Fina nce Division and other departments in identifying federal programs. In addition, we recommended the City provide more training to both grant management staff and finance staff to enhance the skill in identifyi ng pass through programs and ensure the accuracy and completeness of the Schedule.
Status:
Not implemented. See current year finding 2024-003.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
21 Section III – Federal Awards Finding and Questioned Costs
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit
2024-004 – Allowable Costs/Cost Principles – Internal Control and Compliance over Payroll Expenditures
Identification of the Federal Program:
Assistance Listing Number: 14.218
Assistance Listing Title: CDBG - Entitlement/Special Purpose Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A
Federal Award Identification Number: B-21-MC -06-0026, B-23-MC-06-0026, B-20-MW-06-0026, Program Income
Assistance Listing Number: 14.231
Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A
Federal Award Identification Number: E-23-MC-06-0026, E-20-MW-06-0026
Assistance Listing Number: 21.027
Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury
Pass-Through Entity: N/A
Federal Award Identification Number: N/A
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation):
Total salaries charged to federal awards (including ex tra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must:
Be incorporated into the organization’s official records;
Reasonably reflect the total activity for which the em ployee is compensating across all grant related and non-grant related activities (100% effort);
Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on genera l/or administrative activities, vacation, sick leave, leave without pay, etc.); and
Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies).
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
22 Section III – Federal Awards Finding and Questioned Costs (Continued)
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2024-004 – Allowable Costs/Cost Principles – Internal Control and Compliance over Payroll Expenditures (Continued)
Condition:
CDBG - Entitlement/Special Purpose Grants Cluster
For two (2) out of forty (40) payroll samples tested, empl oyees’ benefits and compensated leave were charged to the CDBG program for the pay periods selected even though the employees did not have any actual hours charged to the program.
Emergency Solutions Grant Program (ESG)
For two (2) employees out of the seven (7) tested with ESG and ESG-CV charges, payroll-related costs were charged to the ESG program even though these employees we re not included on the official budget allocation file used to support the distribution of payroll costs. The ex ceptions consisted of benefits and compensated leave and occurred in five (5) of twenty-three (23) total payro ll transactions tested. In addition, our review of the disbursement reports during fiscal year 2024 identified three (3) additional employees with ESG or ESG-CV payroll charges who were not included on the official budget allocation file, bringing the total to five (5) employees not included on the official budget allocation file.
Coronavirus State and Local Fiscal Recovery Funds (ARPA)
Our review of the distribution reports indicated that one (1) employee who did not work on ARPA during the pay period tested had benefit costs allocated to ARPA. In addition, for one (1) out of the forty (40) employees tested, certain benefit amounts were charged twice to the ARPA program, with duplicate lines posted to the same expense account as regular salaries. The City indicated that the duplicate charges were due to a system setup error.
Cause:
The condition appears to have occu rred because the City did not perform sufficient review procedures over payroll allocations to federal programs. Payroll charges were allowed to pos t based on budget allocation files and system configurations that were not regularly validated to underlying timekeeping records. In addition, system setup issues that resulted in duplicate postings of certain benefits were not identified and corrected in a timely manner.
Effect or Potential Effect:
As a result of these conditions, payroll and related bene fit costs charged to ESG, ARPA, and CDBG was not be fully supported or was allocated properly to the respectiv e federal programs. Federal expenditures reported to the grantor may therefore be misstated, and there is an increased risk that the City could be required to reclassify or refund portions of the costs charged to these awards.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
23 Section III – Federal Awards Finding and Questioned Costs (Continued)
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2024-004 – Allowable Costs/Cost Principles – Internal Control and Compliance over Payroll Expenditures (Continued)
Questioned Costs:
None.
Context:
See condition above for the context of the finding.
Identification as a Repeat Finding, If Applicable:
Yes. See prior year finding 2023-003.
Recommendation:
We recommend that the City enhance its internal c ontrols over payroll processes by implementing policies and procedures that ensure employee comp ensation charged to federal programs is supported by contemporaneous or after-the-fact documentation of actual time and effort spent on federal program activities.
Views of Responsible Officials:
Management concurs with the finding.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
24 Section III – Federal Awards Finding and Questioned Costs (Continued)
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2024-005 – Procurement and Suspension, and Debarment – Internal Control and Compliance over Procurement and Verification Against the System for Award Management (“SAM”)
Identification of the Federal Program:
Assistance Listing Number: 21.027
Assistance Listing Title: Coronaviru s State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury
Pass-Through Entity: N/A
Federal Award Identification Number: N/A
Assistance Listing Number: 97.044
Assistance Listing Title: Assistance to Firefighters Grant Federal Agency: Department of Homeland Security
Pass-Through Entity: N/A
Federal Award Identification Number: EMW-2020-FG-15445, EMW-2021-FG-00268
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation):
Suspension and Debarment, Non-Federal entities are pr ohibited from contracting with or making subawards under covered transactions to parties that are suspe nded or debarred. “Covered transactions” include those procurement contracts for goods and services awarde d under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or ex ceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocur ement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are cons idered covered transactions, unless they are exempt as provided in 2 CFR section 180.215.
When a non-Federal entity enters into a covered transacti on with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still re fer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the en tity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300).
Pursuant to 2 CFR 200.318 of the Uniform Guidance, th e City is required to comply with the procurement standards, when using federal funds. These standards require non‑federal entities to maintain and use documented procedures for procurement transactions under a Federal aw ard or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in 2 CFR 200.317 through 2 CFR 200.327. The City’s purchasing policies require that all purchases charged to the City have an aut horized Purchase Order (PO) in place before an order is placed or goods are received. The policy states that if an individual attempts to make a purchase without a City PO number, the vendor must request an authorized PO number and the name and department of the individual.
The purchase order number is essential for conducting business with the City and ensures proper authorization, documentation, and payment. Therefore, all transactions including orders of goo ds or materials regardless of cost or type must be supported by a valid, approved PO prior to purchase activity.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
25 Section III – Federal Awards Finding and Questioned Costs (Continued)
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2024-005 – Procurement and Suspension, and Debarment – Internal Control and Compliance over Procurement and Verification Against the System for Award Management (“SAM”) (Continued)
Condition:
Coronavirus State and Local Fiscal Recovery Funds (ARPA)
During our audit, we noted that eleven (11) out of thirty seven (37) suspension and debarment samples tested, the City did not have documentation on ve rifying the vendors against the SAM to ensure that they were not suspended or debarred from federally funded purchases.
We also noted that thirty one (31) out of thirty seven (37) procurement samples tested, the City didn’t have purchase orders for these samples.
Assistance to Firefighters Grant
During our audit, we noted that two (2) out of two (2) procurement samples tested, the City did not have documentation on verifying the vendors against the SAM to ensure that they were not suspended or debarred from federally funded purchases.
Cause:
The City did not have a consistent process in place to ensure that the procurement process have been followed and maintained, and to require staff maintain the proof of verification performed on checking the suspension or debarment over vendors that the City makes contracts with federally-funded projects.
Effect or Potential Effect:
The lack of purchase orders limits transparency into procurement process, approval, and authorization, and weakens internal controls over spending. Without ve rifying whether vendors are suspended or debarred from working on federally-funded projects, the City could be contracting with vendors that are prohibited from working on federally-funded projects.
Questioned Costs:
None.
Context:
See condition above for the context of the finding.
Identification as a Repeat Finding, If Applicable:
Not applicable.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
26 Section III – Federal Awards Finding and Questioned Costs (Continued)
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2024-005 – Procurement and Suspension, and Debarment – Internal Control and Compliance over Procurement and Verification Against the System for Award Management (“SAM”) (Continued)
Recommendation:
We recommended the City establish internal control procedures to monitor compliance requirements to ensure the procurement process is implemented and monitored, a nd vendors are not suspended or debarred from federally- funded purchases.
Views of Responsible Officials:
Management concurs with the finding.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
27 Section III – Federal Awards Finding and Questioned Costs (Continued)
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2024-006 – Reporting – Internal Control and Compliance over Reporting
Information of the Federal Program(s):
Assistance Listing Number: 14.218
Assistance Listing Title: CDBG - Entitlement/Special Purpose Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A
Federal Award Identification Number: B-20-MW-06-0026
Assistance Listing Number: 21.027
Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury
Pass-Through Entity: N/A
Federal Award Identification Number: N/A
Assistance Listing Number: 66.958
Assistance Listing Title: Water Infrastructure Finance and Innovation Federal Agency: U.S. Environmental Protection Agency Pass-Through Entity: N/A
Federal Award Identification Number: N/A
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation):
The OMB Compliance Supplement requires that reports submitted to the Federal awarding agency include all activity of the reporting period, are supported by underlying accounting information and are presented in accordance with program requirements.
Community Development Block Grants-Entitlement Grants Cluster
Pursuant to Guidance on Section 15011 of the CARES Act requires that recipients of $150,000 or more of CARES Act funding submit, not later than 10 days after the end of each calendar quarter, a report containing:
information regarding the amount of funds received; the amount of funds obligated or expended for each project or activity; a detailed list of all such projects or activities, including a description of the project or activity; and detailed information on any subcontract s or subgrants awarded by the recipient. This report is limited to Community Development Block Grants/Entitlement Gran ts Cluster - COVID-19 funding and does not include other Community Development Block Gr ants/Entitlement Grants Cluster funds that may be used to address coronavirus. Grantees and subrecipients have re ported data meeting the Section 15011 requirements at usaspending.gov. The Pandemic Response Accountability Committee (PRAC), an independent oversight committee within the Council of the Inspectors General on In tegrity and Efficiency, has determined that the data reported in usaspending.gov has fulfilled these reporting requests. (“Section 15011 Report”).
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
28 Section III – Federal Awards Finding and Questioned Costs (Continued)
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2024-006 – Reporting – Internal Control and Compliance over Reporting (Continued)
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation) (Continued):
Coronavirus State and Local Fiscal Recovery Funds
Quarterly Project and Expenditure Reports (QP&E) – A ll metropolitan cities and counti es with a population that exceeds 250,000 residents that receive Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”) are required to submit Project and Expenditure Reports. For these recipients, a quarterly Project and Expenditure Report must be submitted to U.S. Department of the Treasu ry by the last day of the month following the end of the period covered.
The due dates of each quarterly reports is noted below:
Reporting Period Grantee QP&E
Covered Submission Deadlines
July 1 - September 31, 2023 October 31, 2023
October 1 - December 31, 2023 January 31, 2024
January 1 - March 31, 2024 April 30, 2024
April 1 - June 30, 2024 July 31, 2024
The recipients are also required to disclose all current period obligations, cumulative obligations, current period expenditures, and cumulative expenditures in Quarterly Project and Expenditure Reports, as a part of the obligations and expenditures requirement.
Water Infrastructure Finance and Innovation
In accordance with Section 16, Annual Financial Statements, of the WIFIA Loan Agreement, the City is required to deliver to the WIFIA Lender, as soon as available but no later than one hundred eighty (180) days after the end of each City Fiscal Year, a copy of the audited income stat ement and balance sheet of the City, along with related audited statements of operations and cash flows for the fiscal year.
Condition:
CDBG - Entitlement/Special Purpose Grants Cluster (CDBG)
We noted that the City did not submit any of the four (4) quarterly Section 15011 Reports for the year ended June 30, 2024.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
29 Section III – Federal Awards Finding and Questioned Costs (Continued)
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2024-006 – Reporting – Internal Control and Compliance over Reporting (Continued)
Condition: (Continued)
Coronavirus State and Local Fiscal Recovery Funds (ARPA)
During testing of the City’s reporting under the ARPA Re venue Loss category, we noted that the City recorded $3,570,000 in expenditures related to revenue loss that we re not reported in the quarterly Project and Expenditure (P&E) reports. Additionally, the April–June 2024 P&E report, which is also included in the annual performance report, incorrectly recorded an amount in 2023 revenue loss that duplicated the same amounts reported for 2022, resulting in a change to the reported revenue loss from the previous quarter. We also noted that two out of four quarterly P&E reports required for the year ended June 30, 2024 were subm itted after the required due dates as follows:
Grant / Project Period Covered Due Date Submitted
SLT-3028-P&E Report-Q3 2023 July- Sept 2023 10/31/2023 11/5/2023 SLT-3028-P&E Report-Q1 2024 Jan- March 2024 4/30/2024 5/1/2024
Furthermore, the P&E report covering April–June 2024 did not include current period expenditure amounts for all projects. During our audit, we found that the City reporte d only $11,867,558 in the P&E reports instead of the actual $15,225,289 in expenditures incurred during year ended June 30, 2024.
Water Infrastructure Finance and Innovation (WIFIA)
During testing, we noted that the Annual Comprehensive Financial Report for year e nding June 30, 2024 was dated on September 17, 2025, which was after the 180 days submission deadline (December 27, 2024).
Cause:
The City was not aware of the Section 15011 CARES reporting.
Lack of monitoring to ensure the timely submission of the required reports with appropriate support.
The delay in financial reporting also led to the incompliance with the WIFIA reporting requirement.
Effect or Potential Effect:
Delay in filing and not filing the reports resulted in noncompliance with the complia nce requirements, and the errors had led to potential misstatements on the SEFA.
Questioned Costs:
None.
Context:
See condition above for the context of the finding.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
30 Section III – Federal Awards Finding and Questioned Costs (Continued)
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2024-006 – Reporting – Internal Control and Compliance over Reporting (Continued)
Identification as a Repeat Finding, If Applicable:
Yes. See prior year finding 2023-005.
Recommendation:
We recommend that the City conduct thorough research on the reports needed to be submitted and contact the grantor if there is any confusion. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval.
Views of Responsible Officials:
Management concurs with the finding.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
31 Section III – Federal Awards Finding and Questioned Costs (Continued)
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2024-007 – Special Tests and Provisions – Internal Control over Environmental Reviews
Information of the Federal Program(s):
Assistance Listing Number: 14.218
Assistance Listing Title: CDBG - Entitlement/Special Purpose Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A
Federal Award Identification Number: B-23-MC-06-0026
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation):
The OMB Compliance Supplement requires that recipients must perform environmental reviews in accordance with 24 CFR Part 58. The responsible entity must prepare and maintain an Environm ental Review Record (ERR) that documents the environmental review and the decisi on-making process. Projects must have an environmental review unless they meet criteria specified in the regula tions that would exempt or exclude them from RROF and environmental certification requirements (24 CFR sections 58.1, 58.22, 58.34, 58.35, and 570.604).
Pursuant CDBG Grants Management Manual, Chapter 3, Environmental review, The environmental certifying officer “ECO” accepts full responsibilit y for the completeness and accuracy of the review and compliance with applicable laws and regulations. Local officials should review the municipal liability and indemnification statutes as well as the status and coverage of local liab ility insurance policies when accepting responsibility under environmental laws. The responsibilities of the ECO include making findings and signing required certifications.
Condition:
During testing of environmental review records, one (1) of twenty one (21) environmental review records tested did not include a signature from the responsible offici al. Although the environmental review documentation and supporting analysis were present, the ERR lacked the re quired signature from the certifying official, as required by HUD regulations.
Cause:
Lack of internal control over the E RR to ensure the forms were properly si gned and reviewed prior to approving the project activities.
Effect or Potential Effect:
Without a signed Environmental Review Record, the C ity cannot demonstrate it is in compliance with the environmental review and certification requirements under 24 CFR Part 58. This omission could potentially place the City at risk of noncompliance with federal envir onmental requirements and jeopardize the eligibility of the related project funded by Community Development Block Grants/Entitlement Grants (“CDBG”).
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
32 Section III – Federal Awards Finding and Questioned Costs (Continued)
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2024-007 – Special Tests and Provisions – Internal Control over Environmental Reviews (Continued)
Questioned Costs:
None.
Context:
See condition above for the context of the finding.
Identification as a Repeat Finding, If Applicable:
Not applicable.
Recommendation:
We recommend that the City strengthen its internal cont rols over environmental review documentation to ensure that all Environmental Review Records are fully complete d, including the signature of the certifying official prior to project approval or commitment of CDBG funds.
Views of Responsible Officials:
Management concurs with the finding.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
33 Section III – Federal Awards Finding and Questioned Costs (Continued)
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2024-008 – Special Tests and Provisions – Internal Control and Compliance over Obligation, Expenditure, Payment Requirements
Identification of the Federal Program:
Assistance Listing Number: 14.231
Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Departme nt of Housing and Urban Development Pass-Through Entity: N/A
Federal Award Identification Number: E-21-MC-06-0026, E-22-MC-06-0026
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation):
Pursuant to May 2024 Compliance Supplement, Special Tests and Provisions – Obligation, Expenditures and Payment Requirements:
Obligation-ESG funds allocated to metropolitan cities, urba n counties, and territories. Within 180 days after the date that HUD signs the grant agreement (or a grant am endment for reallocation of funds) with a metropolitan city, urban county, or territory, the recipient must obligate all of the grant amount, except the amount for its administrative costs.
ESG-CV funds must be obligated by the recipient in accordance with 24 CFR 576.203( a)(1) and (2), except as provided below. The applicable period for obliga ting ESG-CV funds begins on the date HUD signed the recipient’s grant agreement for the first allocation of ESG-CV funds. The obligation deadlines below apply to both the first and second allocations of ESG-CV funds. HUD is also providing further flexibility for recipients (including states and non-states) by allowing additional time to identify entities th at have the capacity and expertise to mitigate the impacts of coronavirus, including entities that have not prev iously or recently received ESG funding.
a. Recipients that are metropolitan cities, urban countie s, or territories may have up to 240 days from the date HUD signs the grant agreement to obligate ESG -CV funds. Recipients must maintain in their program records a description of any changes the recipient implemented to identify and select new subrecipients.
Payments to Subrecipients. The recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient’s complete payment request. This requirement also applies to each subrecipient that is a unit of general-purpose local government (24 CFR section 576.203).
Condition:
During our audit, we noted that for four (4) out of five (5) total sub-recipients tested this year, the ESG Grant Fund obligated to sub-recipients under obligation testing we re outside of the obligation timeframe of 180 days in case of ESG and 240 days in case of ESG CV without further justifications.
In addition, we noted two (2) out of third (3) samples selected for payment requirements testing were outside of 30 days window without further justifications.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
34 Section III – Federal Awards Finding and Questioned Costs (Continued)
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2024-008 – Special Tests and Provisions – Internal Control and Compliance over Obligation, Expenditure, Payment Requirements (Continued)
Cause:
The City does not have formal policies and procedures in place to obligate the funds within the required timeframe nor complete the subrecipient’s payment request within 30 days. In addition, the City did not have procedures in place to timely request grantor extensions a nd/or document exceptions that are outside of uniform guidance.
Effect or Potential Effect:
The exceptions noted resulted in noncompliance.
Questioned Costs:
None.
Context:
See condition above for the context of the finding.
Identification as a Repeat Finding, If Applicable:
Yes. See prior year finding 2023-006.
Recommendation:
We recommended the City establish internal control procedures to monitor compliance requirements to ensure the subrecipient’s payment requests are processed timely.
Views of Responsible Officials:
Management concurs with the finding.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
35 Section III – Federal Awards Finding and Questioned Costs (Continued)
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2024-009 – Special Tests and Provisions – Internal Control and Compliance over Housing Quality Standards
Assistance Listing Number: 14.239
Assistance Listing Title: HOME Investment Partnerships Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A
Federal Award Identification Number: M-17-MC-0 6-0221, M-21-MC-06-0221, M-22-MC-06-0221, M-21- MP-06-0221
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation):
Pursuant to 24 CFR 92.209(i), 92.251(f), and 92.504(d), the participating jurisdiction must perform on-site inspections to determine compliance wi th property standards and verify th e information submitted by the owners no less than (a) every three years for projects containi ng one to four units, (b) every two years for projects containing five to 25 units, and (c) every year for pr ojects containing 26 or more units. The participating jurisdiction must perform on-site inspections of rent al housing occupied by tenants receiving HOME/HOME- ARP-assisted tenant-based rental assistance to determine compliance with housing quality standards.
Condition:
During our audit, we noted that the City has not performed any housing inspections required under the HOME Investment Partnerships Program since 2019, citing staff shortages as the reason for nonperformance.
Cause:
The City did not perform housing inspections due to sta ffing issues and lack of adequate resources allocated to the compliance function.
Effect or Potential Effect:
Failure to conduct required housing inspections increases the risk that HOME- assisted units do not meet federal property standards, potentially resulting in noncompliance with program requirements and exposure to questioned costs or repayment obligations.
Questioned Costs:
None.
Context:
See condition above for the context of the finding.
Identification as a Repeat Finding, If Applicable:
Not applicable.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
36 Section III – Federal Awards Finding and Questioned Costs (Continued)
A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2024-009 – Special Tests and Provisions – Internal Control and Compliance over Housing Quality Standards (Continued)
Recommendation:
The City should implement procedur es to ensure timely housing inspections in accordance with HOME Program requirements. This includes allocating sufficient sta ff resources, establishing a monitoring schedule, and documenting all inspections performed. If staffing limitati ons persist, the City should consider temporary contracting or interdepartmental support to meet compliance obligations.
Views of Responsible Officials:
Management concurs with the finding.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
37 Section III – Federal Awards Finding and Questioned Costs (Continued)
B. Prior Year Findings and Questioned Costs – Major Federal Award Program Audit
2023-003 – Allowable Costs/Cost Principles – Internal Control over Payroll Expenditures
Identification of the Federal Program:
Assistance Listing Number: 14.231
Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A
Federal Award Identification Number: E-20- MW-06-0026, E-21-MC-06-0026, E-22-MC-06-0026
Assistance Listing Number: 14.218
Assistance Listing Title: Community Developm ent Block Grants-Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A
Federal Award Identification Number: B-20-MW -06-0026, B-21-MC-06-0026, B-22-MC-06-0026, B-23-MC-06-0026 Program Income
Condition:
Emergency Solutions Grant Program
The City was unable to locate and provide the timesheets fo r (2) out of eleven (11) samples tested with Payroll Cost allocated to the Program. Within the overall population of a hundred and five (105) lines of ESG and ESG- CV payroll charges, the City also had four (4) unsuppor ted employee benefits charged to the program has benefit charged to program.
Community Development Block Grants-Entitlement Grants Cluster
Payroll costs for eighteen (18) out of forty (40) samples tested were allocated to programs were not supported by approved time samples or updated cost allocation methods/p lan, nor were they reconciled to actual time spent on the various programs.
Recommendation:
We recommended that the City enhance its internal co ntrols over payroll processes by implementing policies and procedures that ensure employee comp ensation charged to federal programs is supported by contemporaneous or after-the-fact documentation of actual time and effort spent on federal program activities. Additionally, all supporting documentation should be properly saved.
Status:
Not implemented. See finding 2024-004.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
38 Section III – Federal Awards Finding and Questioned Costs (Continued)
B. Prior Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2023-004 – Eligibility – Internal Control Over Eligibility
Identification of the Federal Program:
Assistance Listing Number: 21.023
Assistance Listing Title: Emergency Rental Assistance Program Federal Agency: Department of Treasury
Pass-Through Entity: State of California Department of Finance Federal Award Identification Number: N/A
Condition:
During our audit, we noted five (5) samples out of nine (9) samples selected for the eligibility requirement testing with internal control deficiency related to the income eligibility verification. The city failed to collect the zero income attestation document from applicant. The amount of income shown in documents uploaded by applicant was different from the amount shown in application/syst em, check box for income verification was not ticked off by supervisor though the verification was completed. However, we recalculated those five applicants’ income based on the income verification support provided and those a pplicants were eligible to receive the grant subsidy based on the income limit.
Recommendation:
We recommended the City enhance its internal control by implementing po licies and procedures over eligibility requirement
Status:
During the year ended June 30, 2024, the program expenditures consisted solely of payroll costs. No other types of expenditures were incurred during the period; therefore, the eligibility testing noted in the prior finding was not applicable. Based on the nature of current-year program ac tivity, the prior-year finding is considered resolved as of June 30, 2024.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
39 Section III – Federal Awards Finding and Questioned Costs (Continued)
B. Prior Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2023-005 – Reporting – Internal Control and Compliance over Reporting
Information of the Federal Program(s):
Assistance Listing Number: 14.218
Assistance Listing Title: Community Developm ent Block Grants-Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A
Federal Award Identification Number: B-20-MW-06-0026
Condition:
As a result of our test work, we noted that the City did not submit any of the four (4) quarterly Section 15011 Reports for the year ended June 30, 2023.
Recommendation:
We recommended that the City conduct thorough research on the reports needed to be submitted and contact the grantor if there is any confusion. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval.
Status:
Not implemented. See finding 2024-006.
ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
40 Section III – Federal Awards Finding and Questioned Costs (Continued)
B. Prior Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued)
2023-006 – Special Tests and Provisions – Internal Control and Compliance over Obligation, Expenditure, Payment Requirements
Identification of the Federal Program:
Assistance Listing Number: 14.231
Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Departme nt of Housing and Urban Development Pass-Through Entity: N/A
Federal Award Identification Number: E-20- MW-06-0026, E-21-MC-06-0026, E-22-MC-06-0026
Condition:
During our audit, we noted that the ESG Grant Fund oblig ated to sub-recipients under obligation testing were outside of the obligation timeframe of 180 days in case of ESG and 240 days in case of ESG CV without further justifications.
In addition, we noted two (2) out of seven (7) samples selected for payment requirements testing were outside of 30 days window without further justifications.
Recommendation:
We recommended the City establish internal control procedures to monitor compliance requirements to ensure the subrecipient’s payment requests are processed timely.
Status:
Not implemented. See finding 2024-008.
ATTACHMENT A
City of Stockton
Legislation Text
File #: 26-0340, Version: 1
UPDATE ON POLICE SUBSTATIONS
RECOMMENDATION
Informational only. No action to be taken.
Summary
This will be an informational presentation to update Mayor and Council on the Police Substations.
City of Stockton Printed on 3/26/2026Page 1 of 1
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City of Stockton
Legislation Text
File #: 26-0230, Version: 1
COUNCIL COMMITTEE/BOARD AND COMMISSION MINUTES
RECOMMENDATION
Information item only. No action required.
City of Stockton Printed on 3/26/2026Page 1 of 1
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